Thank you Chair Comrie, Chair Kennedy and Senators for inviting us to speak today.
My name is Maulin Mehta, and I am New York Director at the Regional Plan Association. I will focus most of my remarks today on our concerns related to the MTA’s budget forecast. RPA has long been a champion for a more equitable, reliable and modern transportation network to serve as a backbone for our region. This only happens with sustained, multi-year investments to make sure service improves and expands to meet the needs of New Yorkers.
We are at a critical moment. Work from home trends have put pressure on the city and MTA finances. The average white collar worker will spend about 30% less time in the office per week. This has serious implications for the City’s finances with estimates that Manhattan workers alone will spend $12 billion less annually as a result of these trends.
As a result, ridership has struggled to get back to pre-pandemic levels. In February, weekday ridership across the network was between 62-66% of where it was before. Weekend ridership has come back more, with subways averaging 75% and the LIRR 91%. And off-peak commuting patterns have also changed, highlighting the complicated new normal the MTA has to grapple with.
This has consequences for the MTA’s budget. Even with federal COVID relief packages, reduced revenue from the farebox has created a potential $1.2 billion fiscal crisis that jeopardizes the entire system’s viability. We cannot address the MTA’s fiscal challenges through service cuts and layoffs. While those fortunate to have work-from-home policies might adjust to drastic service changes, nearly half of all workers would not have this option. And as our compounding crises continue to push the most vulnerable New Yorkers further out, we risk enabling a more inequitable City if we do not act to secure the MTA.
To do so, the MTA needs a new revenue model that provides a sustainable operating budget and supports more frequent off-peak service. One-time payments won’t solve the problem and would create further long-term uncertainty. Governor Hochul’s proposal to address the fiscal challenges asks that everyone who benefits from the system contribute to its success, and is a fair proposal.
Under her proposal, NYC would contribute 27% of dedicated taxes and subsidies made to the MTA, while NYS would contribute 37%. An incremental increase in the payroll mobility tax from .34% to .5% would generate an additional $800 million in recurring revenue, impacting only 5% of all employers, mostly from NYC.
The PMT was critical for the MTA during the financial crisis and despite fears when it was adopted, the PMT did not hurt economic growth - and in fact, more jobs have been created in counties where PMT is collected.
The MTA has also committed to reducing its operating budget gap by identifying $400 million in savings through a number of efforts that will not lead to significant service impacts.
If we make mistakes with the MTA’s finances now we risk creating a downward spiral of reduced ridership and less reliable service. Now is the time to invest, not disinvest, in the future of transit.
Briefly on Penn Station, RPA has long believed our region’s riders deserve far more from the busiest train station in the Western Hemisphere. We can all agree the station has serious safety, wayfinding, and accountability issues, and is unequipped to handle the capacity needs of the region for the foreseeable future.
We strongly believe that it is essential to both renovate the existing piece of Penn Station and build an expansion to allow for increased capacity, as we do not believe reorganizing the station for through-running service will meet the region’s needs. While some concepts about what the renovation and expansion might look like have been floated, we are largely withholding judgment until after the draft Environmental Impact Statements are released for both projects, in the hopes that they will address many of the questions and concerns we currently have.
As for the General Project Plan proposed by Empire State Development, we believe that the GPP makes sense in concept, as building density in the area with the strongest transit connections in the region is good economic development and environmental policy, but we do think careful consideration of each PILOT proposal for each of the development sites is warranted. If the GPP does not move forward, we certainly believe that New York State must find other funding sources in order to ensure the Penn Station renovation and expansion projects move forward, as RPA believes they are fundamental to the future health and prosperity of the entire region.
Thank you for your time.
