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The Metropolitan Transportation Authority’s (MTA) board yesterday approved its 2021 budget and four-year financial plan, which assumes the agency will receive $4.5 billion in federal aid in 2021.
The federal funds would allow MTA to starve off drastic service cuts and the layoff of 9,400 employees, cost-cutting measures that were proposed last month in response to its financial crisis caused by the COVID-19 pandemic. The cuts would have reduced MTA New York City Transit subway service by 40% and the MTA Long Island Rail Road and Metro-North Railroad commuter-rail service by 50%, MTA officials said in a press release.
For now, MTA staff held off on voting for those cuts until January, Bloomberg reported.
Even if the MTA receives $4.5 billion in federal aid, this will only balance the agency’s 2021 budget, falling far short of solving the total deficit over the four-year plan, MTA officials said.
The agency projects it would still face nearly $8 billion in deficits between 2022 and 2024.
The MTA has closed budget deficits exceeding a combined $8 billion for 2020 and 2021 by leveraging $2.9 billion from the Federal Reserve Municipal Liquidity Facility and assuming $4.5 billion in federal aid in 2021, in addition to significant agency cost saving efforts.
MTA also has taken steps to cut costs internally, focusing on three key areas: reducing overtime, consulting contracts and other non-personnel expenses.
"The MTA continues to face the worst financial crisis in history and was able to close our budget deficit for 2021 with 2020 deficit borrowing and the assumption we will receive $4.5 billion from the federal government," said MTA Chief Financial Officer Bob Foran. “If Washington does not come through, our budget will be in free fall — and that does not even account for significant out-year budget gaps we are facing in 2022, 2023 and 2024. There will be hard choices ahead."
To learn more about the challenges MTA has faced this year, read this article in Progressive Railroading's November issue.