The U.S. Senate's $1 trillion HEALS Act, which includes no further COVID-19 relief aid for transit systems nationwide, is "shameful," said Patrick Foye, chairman of New York's Metropolitan Transportation Authority.
"This backwards bill will only further devastate our country and economy with no dedicated funding for mass transit — the circulatory system of the nation — and no new support for state and local governments," Foye said in a statement Tuesday.
The $3 trillion HEROES Act, which the Democratic-controlled House of Representatives passed, included $15.75 billion for emergency transit relief to maintain basic transit services. The Senate has yet to take up that bill.
According to Foye, the COVID-19 crisis has imposed a "once-in-a-100-year fiscal tsunami" through plummeting ridership and non-fare revenues. The MTA, he said, needs an additional $3.9 billion in additional emergency federal funding just to keep operating this year.
That would match what the MTA received in March under the CARES Act, which allocated $25 billion to transit systems nationwide. Foye said the MTA has used up its CARES allocation.
The MTA's projected shortfall widens to $11 billion through 2021 if state and local governments reduce their subsidies by an additional $600 million without federal support, Foye said. Compounding the shortfall, he said, is the loss of $1 billion annually beginning in 2021 in congestion pricing revenues.
"Our deficit is really $12 billion," MTA deputy communications director Aaron Donovan said.
A plan to impose congestion pricing for central Manhattan is stalled amid a dispute with the federal government over an environmental review process.
"The MTA has no option other than the beneficiary of federal money, without the revenue that came with the level of ridership that they've enjoyed without interruption for many years," Richard Ravitch, a former MTA chairman and now a Volcker Alliance board member, said on a webcast sponsored by the Penn Institute for Urban Research and the Volcker Alliance.
"Pat Foye's concern is not just for the public authority. It is a concern about the very existence of the city of New York itself," said Ravitch, who on Wednesday was named chairman of PennUIR's new institute on state and local fiscal stability.
The MTA is also one of the largest municipal bond issuers, with roughly $46 billion of debt, including special credits. It has received several downgrades and warnings since March, including on July 7, when S&P Global Ratings lowered its primary transportation revenue bond credit to BBB-plus from A-minus.
According to data on the Municipal Securities Rulemaking Board's EMMA website, a block of MTA Series 2014B transportation revenue bonds maturing in 2025, that originally priced at 116.712 cents on the dollar with a 5% coupon, sold to a customer Tuesday night at a price of 107.844 cents and a 2.83% yield.
Tri-State and other advocacy groups, including the Regional Plan Association, Reinvent Albany and the Permanent Citizens Advisory Committee to the MTA, say adequate funding for the MTA, Port Authority of New York and New Jersey and New Jersey Transit, to name a few, is essential to keep the region’s economy moving.
"Additionally, it is crucial that language is included in the legislation to ensure that major bi-state entities, such as the Port Authority, be able to access funding, which is not possible via traditional transportation formulas," a coalition of 80 groups said in a letter to the congressional delegations of New York, New Jersey and Connecticut. "Their need to continue operations despite a significant revenue decline also requires special attention."
