MTA’s multi-billion dollar budget shortfall and project halt raises construction industry concerns

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MtA 2020 2024 plan
The MTA anticipates an $8 million budget deficit because of seriously declining ridership during the COVID-19 pandemic (reportedly reaching more than 90 percent), WNYC and Gothamist say.
The agency hopes that the federal government will double its current $3.9 billion in funding to cover operating expenses and the significant revenue shortfall created by the decline in riders and fares, Commercial Observer reports.

MTA Chairman Pat Foye says that the agency has frozen construction on all of its capital projects, including the $51.5 billion subway modernization plan and all the work in its current five-year capital plan.

However, the construction freeze does not include $2 billion in station upgrades and repairs that have already been contracted out, including installing elevators at 11 subway stations and repairing the F train’s underwater tunnel.

The New York Building Congress had expected the agency’s construction spending was expected be greater than $8 billion this year. About 20 percent of New York City’s 264,000 construction workers are employed on public sector projects.

MTA construction chief exec Janno Lieber outlined the need for emergency federal funding during the MTA board meeting on June 24.

“If we don’t get HEROES funding or something similar soon, we are moving closer and closer to a fiscal cliff for the MTA capital program,” Lieber said. “In 2009 during the last financial crisis, which was much less severe, the capital budget got cut dramatically. And we know what happens, which is that in the decade that followed, service eroded. Those momentary cuts in investment, especially in an old system that needs state-of-good-repair investment, have dramatic long-term consequences. Service gets unreliable, things break down and our customers feel the consequences. If our leaders in Washington fail to act, the historic MTA capital plan… is at major risk.”

New York Building Congress president Carlo Scissura that New York’s position in the U.S. economy is too important to allow its massive transit agency to fail.

“The bottom line is that the federal government needs to act,” Scissura was quoted as saying in The Commercial Observer. “This is really an unprecedented time for the US. [New York] is the country’s largest economic generator of income. So if the MTA falls, New York’s economy is in peril. And if New York’s economy is in peril, the country’s economy is in peril. If we don’t get the money for the MTA we’re in trouble.”

“You can’t even put a dollar amount on what it would mean to the [construction] industry. There would be thousands upon thousands of people who would lose their jobs, from engineers to construction workers to architects.”

The Building Trades Employers’ Association (BETA) believes that the loss of public construction jobs will be disastrous for the city’s economy and its union construction workers. Its leader Louis Coletti was quoted as saying that the MTA represents estimated “probably 30 percent” of the union construction workforce.

“The economics are clear,” he said. “For every million dollars spent in construction, it generates 18 jobs in New York City. For every $1 spent on construction, $1.50 in economic activity is created. They’re good middle class jobs.”

The decision to freeze MTA construction will “be devastating for those contractors that predominantly do public work,” Coletti said. “When it makes all the sense in the world to fund the MTA and get their work going, they don’t have enough money. And the only place it can come from is Washington, D.C.”

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