One in three belt companies may never return to a subway full-time for commuting after the COVID-19 pandemic — potentially leaving a $9 billion hole in the MTA’s budget, a new study said Monday.
In a worst-case scenario, the proportion of passengers by mid-2026 could be just 73% lower than pre-pandemic levels, according to projections by consultants at McKinsey & Company.
According to MTA CFO Kevin Willens, the MTA will remain in a poor house with 80% of passengers compared to pre-COVID. The CFO said his team expects an annual deficit of close to $1.6 billion.
MTA coffers received more than $15 billion in federal COVID relief after the first wave of the virus devastated the MTA’s operating budget, about half of which was covered in pre-pandemic prices.
Budget officials said in February that federal dollars would cover its annual deficit through 2025. But updated McKinsey forecasts show a cliff is coming a full year ahead.
Wellins warned MTA board members of devastating cuts to service, layoffs and price increases if local and national leaders did not find an alternative source of income.
“When you have a bigger deficit, you spend federal aid faster, which means you run out faster,” Willens said. “We barely have enough money to cover us until 2024.”
McKinley’s new predictions come after her original predictions were derailed with the arrival of the Omicron variant. The ride rate is currently 61% of pre-pandemic levels – 16% lower than consultants had predicted.
The company’s news analysis assumes office workers will only go to work for two days each week in its “low case” scenario, but that passenger numbers will also be affected by the switch to online retail and riders’ perception of safety and service quality.
MTA President Janu Lieber has argued that the authority needs to shift to a less price-based financing model to keep the trains running.
“We are an essential service that has to be paid for – and it shouldn’t be on the shoulders of passengers,” he said in November.
Lieber has yet to put forward any specific funding proposals. Labor Representative John Samuelson suggested on Monday that officials use money raised from the upcoming Manhattan congestion charge to bridge the gap.
“I think this is a logical step,” Willens said during Monday’s Board Finance Committee meeting. “Money is more important right now on the operating budget side than it is on the capital side.”
Ryder advocates want Governor Cathy Hochhol to find the money elsewhere, and use it to expand the service.
“State leaders, led by Governor Hochhol who controls the MTA, should make a new, targeted investment in a more frequent transportation service to boost ridership,” Riders Alliance spokesman Danny Pearlstein said in a statement.
“Because there are fewer people commuting to work, the MTA needs to be better than before to get a greater share of non-work trips.”