The MTA is telling the truth, as it approaches the financial cliff

The MTA is telling the truth, as it approaches the financial cliff

The MTA, parent of Metro-North, did something rare last week: They told us the unvarnished truth.

Not that the MTA has outright lied to us before. Well, at least not very often. But they are the masters of obfuscation and confused communication. Consider these gems:

“Wear a mask,” is now part of his daily mantra. Any traveler can tell you that the traffic agency does not follow its own rule, does not issue tickets to criminals and even allows its drivers and traffic policemen to walk without masks.

“The train is delayed due to operational problems.” That’s a bit redundant, isn’t it? It has been delayed because it is not working. The question is why?

Or my most recent favorite… ‘Ridership on Metro-North hits record levels.” Technically correct, but actually BS. Weekday ridership has only reached 63% of pre-Covid-19 levels… a “record” since 2020, but hardly a real record.

All of this sounds like the agency is communicating with its clients, but it isn’t. And we all know it, which only adds to our cynicism. Sometimes I feel like the Lewis Black of transport.

But then, this week, a surprising thing: they told us the truth. The MTA admitted it did some he makes big mistakes and has real financial problems. They are running out of money and headed for a “fiscal cliff”.

They even admitted what went wrong and, perhaps, how to fix it.

Of course, it’s all tied to COVID and the resulting big drop in traffic. The mistake they made was hiring consultants from McKinsey & Co to help them forecast when ridership would return. When you pay consultants millions of dollars, they usually end up telling you what you want to hear.

McKinsey said subway and train traffic would return to 80-90% of pre-Covid-19 levels by 2025. This is obviously not happening and we all know why.

Of course, there are the new variants of COVID that slow the return to the office. But it is a complete and systemic change in what we consider work that the MTA denies. People don’t want to commute if they can work from home, and they won’t.

I think MTA should demand reimbursement from McKinsey.

Meanwhile, it’s Uncle Sam who has been picking up the tab for the $15 billion shortfall given to the MTA. That money was supposed to see the transit agency through 2025, when ridership would return to normal. right? bad

Metro fares used to account for 51% of operating costs. Today they only cover 32%. The agency is burning through Uncle Sam’s $15 billion too fast. Hence the fiscal cliff in 2024.

What’s in the abyss when MTA runs out of money and goes off that cliff? You don’t want to know. Rate increases, service cuts, layoffs. Think Metro-North is bad now? You haven’t seen anything yet.

Falling off this cliff will lead to a death spiral of worsening service, fewer users, less fare collection, etc.

What is the solution? The MTA says it’s congestion pricing, New York City’s plan to charge cars and trucks entering downtown Manhattan. That plan is moving forward, but it’s far from a done deal.

So kudos to the MTA for finally being honest with us about the problems we have. I’ll give them points for honesty. But now… can we talk about that mask rule?

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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!