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The Metropolitan Transit Authority (MTA) is in serious trouble.
The severity of what is to come for the MTA, its ever-diminishing ridership and, by extension, the economic future of New York City, was laid out for all to see at today's Board meeting.
You might want to turn away. When one of your presentations slides looks like this, well, that's not a good look.
That $991 million projected deficit for 2022? In July, the MTA said it would be $630 million. That's a pretty big adjustment in just a few months and it is mostly due to the on-going decrease in fare revenues. Which is what happens when your train and bus service is, you know, unreliable.
What's changed since July, you ask?
According to the MTA's own presentation (PDF download), they predict $406 million in positive changes to the 2018-2022 plan. The bulk of that amount will come in the form of lower debt service and reduced energy costs. Hard to argue that you wouldn't save on energy costs when the trains don't run.
On the flip side, the MTA predicts $1.03 billion in negative adjustments, led by the $485 million they expect to lose in projected passenger revenue. That more than wipes out the "good news" all by itself.
The MTA is caught in a trap of its own design. After years of kicking the can down the subway tunnel and not investing in long-term solutions, here we are. The damaged caused by Hurricane Sandy didn't help.
If you are bleeding money, you need to do one of three things: cut expenses, raise revenues, or both. Cut expenses too much and you end up having to cut services. Cut services and, naturally, your ridership decreases, costing you revenue.
Maybe you go the other way, then. Increase revenue by raising fares. That will inevitably reduce ridership too and completely screw over the many, many residents of this fine city who have no other economic choice but to use trains and buses to get to and from work. If the MTA increases fares to $3, as it is proposing, that's $30 a week just to go to work.
But even increasing fares will not solve this problem. The MTA needs at least $40 billion to fix all that is wrong with the subway -- barring nothing else happening -- and now it has a near $1 billion budget gap. The solution tossed around today?
"Service reductions, reduction in force or fare and toll increases."
That sounds like a no-win situation for pretty much everyone. There's also the little issue of an expiring, and pricey, union contract that will need to be renegotiated early next year.
No wonder Joe Lhota resigned as MTA chairman last week.
There are a lot of smart people trying to figure out this mess. There are also many who, well, should probably be working elsewhere. The solution, as is the case with any boondoggle this large, will be complex. Both from the revenue and the expense side.
There's a plan, but today's fiscal and political realities keep getting in the way. Someone will need to save this system, though. And soon.
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