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Fitch: MTA remains at risk despite stimulus

MTA will have to make additional cuts by next year unless there's an increase in ridership or some additional government aid, Fitch Ratings says.
Photo – MTA NYCT/Facebook


Recently passed federal stimulus funding will help tide over the Metropolitan Transportation Authority (MTA) in 2021, but financial challenges will remain at the New York City agency without a strong recovery in ridership, according to Fitch Ratings.

Although the $908 billion coronavirus stimulus package — which included more than $4 billion for the MTA — will help balance the MTA's 2021 budget, the agency will have to make additional cuts by next year unless there's an increase in ridership or some additional government aid, the credit rating and research firm reported yesterday.

Signed by President Donald Trump late last month, the stimulus legislation included $14 billion for transit agencies, including the $4 billion for MTA. That amount is similar to what the MTA received under the federal Coronarvirus Aid, Relief and Economic Security (CARES) Act in spring 2020. Without the new aid, MTA officials said they would have made 40% service reductions in New York City Transit subway and bus systems, and 50% service cuts in commuter-rail service. Those cuts would have resulted in 9,400 employee layoffs.

But the additional aid does not address the MTA's fundamental ridership problem, Fitch officials reported. Subway ridership was down 64% as of  Dec. 30, 2020, compared with the same day a year earlier, and bus ridership was down 44%. Ridership growth was flattened after an initial boost coincided with the partial reopening of the city's economy in early summer, but work-from-home levels and restrictions on public gatherings continue, Fitch officials said.

MTA is forecasting a return to "new normal" ridership by 2024 under a best-case scenario, however Fitch expects ridership levels will remain sensitive to effective distribution of the coronavirus vaccine and "the permanency of the transition to remote work and migration to lower-density suburbs," the Fitch report stated.


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