The New York Metropolitan Transportation Authority MTA is expecting a USD 10.5 billion federal aid from December 2020’s Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) and the American Rescue Plan Act (ARPA) passed in March 2021. As a result, the funding will ensure authority’s financial stability through the first half of 2024 while it will not have to take immediate action on cost-cutting measures such as right-sizing of service and wage freezes.
“Thanks to the infusion of Federal funding provided by Congress through December’s relief package and March’s American Rescue Plan, the MTA’s finances are on much better footing,” MTA Chairman and CEO Patrick Foye said.
Since the February plan farebox revenues have improved, toll revenues have remained consistent with the best-case scenario, and Congress passed another federal relief package that is expected to provide USD 6.5 billion in aid to the MTA. Farebox revenue, which was forecasted for the worst-case scenario in February, is now trending toward the midpoint scenario, increasing revenue by USD 3.7 billion through 2024.
Toll revenue holding consistent to the best-case scenario, is expected to increase revenue by USD 799 million by 2024. Absent of recurring revenue streams to offset the postponement of fare increases, service right-sizing and wage freezes, the authority forecasts a deficit of USD 605 million in 2025, even after the use of USD 2.9 billion of deficit bond proceeds.
To cover the budget deficits in 2024 and 2025, the MTA was granted the authority by the 2020-2021 State Enacted Budget to borrow up to USD 10 billion in deficit financing through December 2022.
In 2020, the MTA used the Federal Reserve’s Municipal Liquidity Facility (MLF), which the Federal Reserve established as a source of emergency financing for state and local governments and public entities to ensure they have access to credit during the COVID pandemic, to borrow the maximum USD 2.9 billion allowed. The MLF loan is due for repayment in 2023, and the MTA expects to issue long-term bonds in 2023 to repay the Federal Reserve.
During the February meeting of the MTA Board approved a toll increase that took effect in April on its bridges and tunnels, which raised tolls rates to yield a 6% increase in revenue and preserves the resident discount programmes.