Public transit systems feel pandemic strain

The novel coronavirus pandemic has led to a plunge in ridership on US public transit systems, reducing the number of passengers to record lows as people work from home or flee large cities.

Without a steady stream of revenue from commuters, transit managers struggle to keep their systems running while balancing the necessity for long-term capital improvements to ensure future safety and efficiency.

"This is a once-in-100-year fiscal tsunami," Patrick Foye, chairman of New York's Metropolitan Transportation Authority, or MTA, said last week at a board meeting. "We cannot cut our way out of this crisis."

The MTA operates New York's subways and commuter trains, in addition to some of its buses, bridges and tunnels.

In March, US President Donald Trump signed the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act, or CARES Act, into law. Under that law, the Federal Transit Administration allocated $25 billion to urban transit systems nationwide and $2.2 billion for rural areas. The money can be used for new construction, the purchase of new equipment and operation of existing services.

Now, Congress is debating a second round of funding that is expected to include more money for transit systems. But it's only a stopgap measure.

New York's problems are severe and representative of transit systems nationwide.

The MTA received $3.8 billion through the CARES Act. And while officials said more federal aid is needed, it's not clear how much the system might receive from the expected next round of funding from Washington.

The city's subway system, the nation's largest, faces a projected budget deficit of $16.2 billion through 2024.

Weekday subway ridership in New York City typically exceeds 5 million, but it plunged about 90 percent early in the lockdown intended to curb the spread of the coronavirus. It now has recovered to about 20 percent of pre-pandemic levels.

Most of the transit system's operating revenue from fares and tolls disappeared when the city largely shut down.

The MTA expects to lose about $5.1 billion in fare and toll revenue this year and $2.1 billion from subsidies and dedicated taxes. Next year, the agency expects losses from fares and tolls will ease slightly to $3.9 billion and $1.9 billion, respectively, for subsidies and taxes.

The MTA said it's considering fare and toll increases as well as service cuts and wage freezes to close an estimated $5 billion budget gap next year.

The agency will present its final budget in November, and the board will vote on it the following month.

New debt

Nicole Gelinas, a researcher at the Manhattan Institute, said in a report that the state budget allows the MTA to issue $10 billion in new debt to cover operating expenses and increase the agency's debt limit to $90 billion from $55 billion. Its current debt totals about $45 billion.

Borrowing to cover operations could be risky because money raised through the sale of bonds would not be used to upgrade physical assets such as signals, stations or purchase new subway cars or buses.

Increased debt payments in the future could mean even less money to upgrade trains and buses if the budget is tight.

Service cuts also might erode future ridership: Fewer riders on fewer and less reliable trains could lead to even lower ridership, and less revenue to fund operations. That, in turn, could lead to additional service cuts.

In New York, congestion pricing-charging drivers a fee to enter midtown Manhattan－was intended to raise money for the city's beleaguered transit system, but the plan appears to be on hold.

Other urban transit systems face similar funding dilemmas.

In the San Francisco Bay Area, voters in three counties last March rejected a sales-tax increase to support public transit. Voters in posh counties north of the Golden Gate Bridge rejected a 30-year extension of a tax to support commuter trains.

Other cities also are struggling to balance immediate needs with future capital expenditures.