The MTA's Ongoing Financial Troubles

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Now we turn to the MTA's Looming budget crisis, including newly proposed fair and toll hikes. In the wake of a $600 million projected budget deficit, the MTA wants to raise fairs five and a half percent by June of next year. The transit agency says these hikes are necessary to avoid major cuts to service, with ridership still weigh down since the pandemic began and federal pandemic funding running out. WNYC's transportation reporter, also known as your friendly neighborhood transit reporter on Twitter, Stephen Nessen joins me to discuss the MTA's financial problems and the new fair hike proposals and the alternatives. Hey Stephen, thanks for joining.

Stephen Nessen: Good morning, Brian. Thanks for having me.

Brian Lehrer: To start off, can you tell everybody what's behind the MTA's budget deficit and how big of a problem it is?

Stephen Nessen: Sure. Well, you basically said it, Brian. It's ridership. The MTA relies on subway fairs and bus fairs predominantly to fund the budget. They have two budgets, we're talking about the operating budget. That's the money that's used to mostly pay for the service, to pay workers to clean the trains, to keep the lights on, so to speak. That's the budget that we're talking about here that's just been blown wide open by the pandemic. You'll remember Brian, at the worst of the pandemic ridership was down 90%. The subways were a ghost town but the MTA and the governor made the very conscious decision to keep more or less full service running.

We know they did have those overnight closures. It wasn't 24 hours for a period of time, but that was a short period and during regular hours, they were running full service for basically no one, just the very bare minimum of essential workers. It was costing a lot. We're still having the fallout, the repercussions from that. The MTA expects to be down $2 billion, and a lot of that is just because the ridership's not back. They used to count on more than half of their budget coming from fairs. At this point, ridership is plateaued. We can talk more about that.

Essentially, Monday through Friday when you would expect the most riders, subways are still only at about 60% of what they were before the pandemic. Weekends are actually doing much better. They're back up to about 70% but that's fewer riders as well.

Brian Lehrer: How do you account for the difference between weekday riding and weekend riding recovering a little more?

Stephen Nessen: Well, it's a lot of just working from home, I think. It is interesting, if you look a little bit closer ridership does tend to tick up Tuesday, Wednesday, Thursday. It's down more on Mondays and Fridays. On the weekends people like to go out. I don't think that people are afraid of the subways. I just think there's a new work week, a new paradigm that we're all grappling with.

Brian Lehrer: Well, you just said something very casually that might be a big issue, that people aren't afraid of the subways. We've spent the last four days on the show, it seems to me, talking predominantly about Mayor Adams' new plan to involuntarily commit more mentally ill people who are on the streets. They're not quite saying it this way, but I think that's, to some large degree, an attempt to reassure people who don't feel safe on the subway with respect to crime. Then there are some people who still don't want to go on crowded subways still because of Covid. Maybe people are afraid of the subways.

Stephen Nessen: I know you're going to ask me, "Well, what is the MTA going to do about their big budget crisis?" That is part of it. It's reassuring people that it is safe to ride again, that people can go back on the subways. That group, that subset of people who "fear riding the subways".

Brian Lehrer: Do they talk about how big a subset that is and how much it's actually affecting ridership? If there wasn't the fear in addition to the extra working at home that's settled in for a while at least, if there wasn't that fear factor, would they be at 70%, 80% on the weekdays, do they say?

Stephen Nessen: The MTA does do surveys. I don't know if it's scientific enough to say that 2 million riders are not riding because they fear the subways. A large portion of people who don't ride the subways are afraid of the subways, if you follow me, but people who do ride are slightly less afraid of the subways but yes, it's true. Safety is a concern but the numbers show that we've plateaued it about 60, 63% on weekdays, upwards of 70% on the weekends. People are riding. I think a lot of it is just this new schedule. Those who have the flexibility can work from home. I should add, people are riding into the city, Long Island railroad ridership is up 90% of what it was on the weekends.

Metro-North was at over 111% after Thanksgiving. On Thanksgiving, it was 112% of what it was before the pandemic. People are going out still and they are getting onto mass transit.

Brian Lehrer: Interesting. What's the fare hike proposal exactly?

Stephen Nessen: Well, here's how it breaks down. The MTA will have, you may remember they used to have like a menu of options before the pandemic where they would show different scenarios they're considering. The 10 day might go up or the monthly might go up. Things are a little different now because not that many people are using a monthly pass anymore. It's not clear exactly how it's going to break down, what the scenarios are going to be, but the MTA has said basically, "If we raise fairs five and a half percent next year," next June is what they're aiming for. Then again, in two years, 4%, will get closer to helping them with their deficit.

I know you want to know, Brian, how much is a subway fair going to cost? They haven't said, they haven't given us a specific breakdown yet. Although MTA chairman Janno Lieber has said, you can expect somewhere in the range between $2.75 to $3. They're not laying out a specific hike for each thing yet. It could go any way at this point but the public will have a chance to weigh in on it and discuss a few options that they'll come up with in the coming months.

Brian Lehrer: This is a proposal, not an announcement at this point?

Stephen Nessen: It's pretty much an announcement. The MTA is going to vote on their financial plan for next year. The MTA board's going to do it at the end of December. Essentially, it's a done deal at this point. They're going to do the fare hike. We don't know exactly how it's going to shake down, or how it's going to play out, but there will most likely definitely be a fair hike next year.

Brian Lehrer: You may not be surprised to hear, Stephen, because this often happens when we talk about the subways and the commuter rails and the buses. The lines have filled up even before I gave out the phone number. Actually there are two lines still open. For those of you who don't have us on speed dial, 212-433-WNYC. 212-433-9692, or tweet @Brian Lehrer for your friendly neighborhood transit reporter Stephen Nessen from WNYC and Gothamist. Stephen, is the MTA doing anything besides increasing fairs to solve the budget crisis?

Stephen Nessen: Well, one thing they're definitely doing is asking the governor for $600 million. They're also maybe hoping that the federal government will kick in some money as well but that's one thing they need is they're very clear about, they're projecting $600 million is how much money they need to balance the budget next year. That's one thing they're doing, is lobbying for some tax maybe. It's not clear exactly what revenue stream they're hoping will arrive on their doorstep, but they need $ 600 million. In addition to that, labor contracts are up, transit workers' contracts are up this spring. They're hoping to maybe extract something I think from the TWU, which is a fierce labor union.

We've heard a lot about labor talks this year and the transit workers really carried subway riders through the pandemic. I doubt they will really want to give much ground, but the MTA is hoping to maybe find some labor cost savings as well.

Brian Lehrer: Saud in Brooklyn. You're on WNYC with Stephen Nessen. Hi Saud.

Lorraine: Hello.

Brian Lehrer: Hi. Do I have you? You're on the air, don't listen to your radio. Listen to me. The radio's on delay.

Lorraine: You called Carol?

Brian Lehrer: No, who are you?

Lorraine: Lorraine.

Brian Lehrer: Lorraine, I apologize. I had the wrong name in the little box for this line. Hi Lorraine. You're on WNYC. What's up?

Lorraine: I wanted to say that no fares would have to be increased if they made sure that everyone pays their fare. That is a big problem. People get on the buses. I live in Brooklyn and half the bus, they don't pay. They go in the back door or they just walk by, and the same thing in the subway with jumping the turnstiles. That's what I have to say.

Brian Lehrer: Lorraine, thank you very much. Call us again. Stephen, another big issue in the city is turnstile jumping or walking onto the buses without paying and how and how much the city should crack down.

Stephen Nessen: Indeed. The MTA has said in the past that subway and bus fare evasion accounts for about $500 million a year. Although those numbers are very hard to fact-check and analyze because the MTA, they're not checking every turnstile and every bus. They're doing some mathematical statistical work and arriving at that number. I don't know if that makes Lorraine feel better, but the MTA does have a so-called fare evasion task force that's coming up with a way to address this problem. They're aware of it. $500 million, it would go a long way, especially since they're asking the governor for $600 million, but I don't think the MTA has a good grasp on the fare evasion issue, obviously.

Brian Lehrer: Now I think we have Saud in Brooklyn, if the algorithm coughed up the right name for this line. Saud, is that you?

Saud: Yes, Brian. Thank you very much for taking my phone call. I appreciate. Your long-time listener, second-time phone caller. Brian and your reporter, the biggest problem with the MTA is the construction cost. They're using recycled consultants. They hire the same people. There is almost $5 billion overrun. Your reporters can do a freedom of information why these people are being hired and right when they do not manage the construction job. MTA is broke because of their construction. They hire a bunch of construction manager. One is TDX. Check on the TDX. These people are running bills higher. There is a corruption in organization.

The Inspector General started an investigation in early 2000, but because of 9/11 he stopped. Nobody followed up on it. Second Avenue subway, Andrew Cuomo, run $5 billion extras. Nobody knows where the money went. All these extra costs the MTA debt on construction. I live in London. None of these things happening. They build, they have the best system of Tube. People go from one end of London to another end of London. Yes, there was a congestion fees in '90s because they didn't want people drive to London because the roads and a smaller place, is a historical city. We do not want to change the MTA business.

If we change, your reporter is really clear. Put free monthly formation, get all this construction job. Let me tell you something. When I was working for MTA, an elevator was originally 200,000. At the time they finished, was 1,000,002. Why all these extra runs? MTA is not broke. The corruption is there.

Brian Lehrer: Saud, thank you.

Saul: People work for consulting company. Hold on, Brian. Were working for consulting company, now they're working for MTA. Then they go from MTA back to the consulting company. Sorry to bother you. Thanks for taking my phone call.

Brian Lehrer: No, that's not a bother. Thank you very much for calling and putting that on the table au contraire. Stephen, how much is this on your radar?

Stephen Nessen: Yes, MTA construction costs are much higher than most places around the world, although the MTA bristles when you start to compare it to other cities like Paris or London that also have big old subway systems. The budget deficit that we're talking about today is about their operating expenses, not their capital expenses. Capital is all the big projects. We report on this like gangbusters, why does a new elevator, a new station, cost millions of dollars? There's a staircase in Times Square that opened that cost millions of dollars. We drill down on that a lot here at WNYC and Gothamist. Yes, that is a big problem. Supposedly in the last couple years, they've got things under control slightly, I suppose.

The Grand Central Madison station is opening supposedly later this year or early next year. After extraordinary amounts of overspending and delays, they got things under control in the last five years, the tail end of the project. Supposedly the MTA has worked really hard to address this, but we report voraciously on this topic. I will add that the firm that the caller was mentioning, TDX, I just did a quick search of it. Apparently, they're the business development side that helps small business minority and women-owned businesses at the MTA. I'm not aware of any mismanagement or corruption there exactly, but happy to look into it.

Brian Lehrer: You reported that the MTA received more than $15 billion in relief from Congress in 2020 and 2021. That's obviously pandemic-related relief to help with budgetary shortfalls. Where did that money go?

Stephen Nessen: Well, they still have some of that money. As a matter of fact, let me see if I have the stat in front of me, but I think they're spending about, let's say-- I don't have it exactly in front of me. I looked it up for you, Brian. Now I can't find it. At the worst of the pandemic, let me just go back, they were losing $200 million a week, so they did need the federal relief to just keep the lights on and keep things running. I think there's a debate right now with the budget. They still have some of that money. Excuse me. They're spending now $200 million a month of that federal money. There's about $5.5 billion dollars left out of that 15 billion.

The debate at the MTA, Brian, for the budget that we're talking about, is do you stretch that money over the next four years or do you spend it in the next two years and try to keep costs down and maybe worry about the budget deficit two years from now? I think it's not clear what exactly route they're going to take or some hybrid of the two but they still have some of that money, but it's going fast. Ridership, like we said, is still down. They're not projecting that it'll be back up again until at least 2026, and even by then, the high mark would be 88% of pre-pandemic levels.

Brian Lehrer: Governor Hochul, considering this, said that she expects the MTA to find alternative sources of revenue. I think that phrase is a quote, alternative sources of revenue. What does that mean?

Stephen Nessen: We're not sure. For Governor Hochul's part, she has said that in her state of the state speech next year, early January, she will outline something that she's going to do. We don't know. We've all been bugging her. We've been working our sources behind the scenes to see what are they thinking about. In fact, just today, Brian, the New York Post is reporting that some assembly members pinned a letter to Hochul asking her to find this money. They're willing to put up this money for the MTA to keep trains running, to keep service going. The MTA is hoping it'll be some combination, perhaps, of federal and New York State resources.

Brian Lehrer: Jasmine in Manhattan, you're on WNYC. Hi, Jasmine.

Jasmine: Hello.

Brian Lehrer: Hello.

Jasmine: Hello. Hi. I had a comment. Hi. Good afternoon guys. I have a comment regarding the MTA fare hike. I'm totally against it. Totally against it. As a subway rider, I ride MTA every day, back and forth, to work. There's always issues, always signal problems. They're giving so much overtime to these people who do nothing. I think it's wrong.

Brian Lehrer: Thank you very much. Well, maybe there are signal problems and issues and delays, but this idea that the subway workers do nothing, I don't know about that, Stephen.

Stephen Nessen: Open up the lines for subway workers. [chuckles]

Brian Lehrer: What's that?

Stephen Nessen: Open up the lines for subway workers now, please.

Brian Lehrer: Yes, really.

Stephen Nessen: I don't have the overtime costs in front of me. It is substantial and it has increased as well. Like many labor workforces, like the police or the firefighters, subways also saw a wave of retirements during the pandemic. It was hard work. It was stressful work. A lot of subway workers got sick, you recall. I think more subway workers died than any other workforce, really, from COVID. It's a tough job. It's a tough workforce and they are seeing shortages. There's more overtime to account for not having enough workers. The MTA has been on a hiring spree, after a hiring freeze I should add, during the pandemic as well, to save money.

They lost a lot of workers due to attrition and retirements and they need people back now. For the last year, when you hear about subway delays, a lot of the time it's been worker shortage. They didn't have enough people to run the subways and buses. They're starting to address that and try to get their numbers back, but it's still low. It's still below what it was.

Brian Lehrer: I know that with a contract coming up, negotiations between the MTA and the union are slated for next year, so obviously we will keep our eye on that from both sides. I want to touch two things real brief before you go. One, tolls. Two, we're talking about the transit fares, but the MTA also runs the bridges and tunnels within the city, so the tolls would also go up. What's in that proposal?

Stephen Nessen: Well, just like the 5% fare and toll increase, they'll go up. We don't know exactly how, but drivers will remember last year, their tolls also went up 7% two years ago. It went up 7%. I think drivers are going to have to pay more, probably. It's not just MTA properties. Port Authority is going to be raising its tolls a dollar starting January 2023. The New Jersey Turnpike Authority is also going to be raising tolls by 3% again this year on January 1. Same increase as they had last year.

Brian Lehrer: Last thing, attention drivers, now that we have your attention talking about the tolls, Stephen is moderating a panel tonight about the future of the Brooklyn-Queens expressway, oh, the BQE. Could you explain some of the issues real briefly? I mean, that would take three days, but preview of the conversation that you're going to have about them?

Stephen Nessen: Yes, absolutely. It's going to be at Pratt this evening about 6:30 PM. I think you need to make reservations online but should be able to get in, and it should be enlightening. I'm speaking with former DOT Commissioner Hank Gutman, who had a inside view for about a year in the De Blasio administration on the tail end. As well as he was one of the, I guess panelist is the right word, or contributors to the BQE panel that Mayor De Blasio put together to make recommendations. They put out a report in 2020. That essentially, we won't get into all the details, but you know Brian, the BQE is old.

A few years ago, I believe, about 2018, we started to hear about how dire the triple cantilever section is, that's the three-tier section in Brooklyn Heights. T

Brian Lehrer: I was just going to say I used to think cantilever was a kind of shelf until we started talking about the BQE. Got ahead.

Stephen Nessen: New vocab word, right? They took reporters under there and started drumming up enthusiasm for a plan to fix it. They showed us how the steel was coming through the concrete. There were holes in it. I could see right through the bottom. [laughs] The DoT Commissioner basically said, "If we don't do something soon and immediate by 2026, it may not be drivable." I'm hearing from Hank Gutman that that date could be even sooner. We're going to get some sort of doom and gloom from him, I think, about the current condition of it, and what's been done. Quite frankly, I think you'll remember, Brian, they kick the can down the road. Nothing has been done.

There was those plans to build a highway above the BQE temporarily, and residents went into pandemonium. Everyone was like, "Absolutely, we're not doing that," but they didn't do anything. I shouldn't say not anything. They did turn three lanes into two lanes to reduce the weight on the bridge or on the roadway, and they put sensors on it that are supposed to go into effect later this year and start ticketing oversize trucks. That's the micro problem. The macro problem is what do we do with this outdated roadway that's constantly clogged with traffic and goes through not just the lovely Brownstone Brooklyn Heights neighborhood but through all kinds of neighborhoods in Brooklyn and Queens.

A new paradigm. There's climate change, global warming. The idea of spending billions of dollars on a small portion of a highway is less and less attractive, I think, to a lot of people. We're going to wrestle with those big ideas. What can we do? What should we do? What needs to be done? Will trucks be banned from the BQE? How will deliveries be made in New York City in the future? Some fun topics. Maybe you'll have us all back on, Brian, for our own on-air panel as well.

Brian Lehrer: I think that's a good idea. In the meantime, the in-person panel, if you want to go folks, Stephen moderating a panel called Transportation Equity and the Future of the Brooklyn-Queens Expressway tonight 6:30 for an hour at Pratt School of Architecture at the Higgins Hall auditorium, 61 Saint James place in Brooklyn. It's free and open to the public, but reservations through Pratt's Events website are necessary for that BQE panel tonight. We thank WNYC and Gothamist transportation reporter Stephen Nessen for joining us this morning and explaining the budget mess and its implications for everybody at the MTA. Stephen, thanks as always.

Stephen Nessen: Thank you, Brian.

 

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