Metropolitan Transportation Authority (MTA) Chair and CEO Janno Lieber made a live appearance on Bloomberg TV’s Balance of Power with David Westin to discuss the recently released Environmental Assessment relating to congestion pricing and other transit-related issues.
A transcript of the interview appears below.
David Westin: If you live in or around New York City, you care about the MTA, the Metropolitan Transportation Authority because they run our subways and so much of our buses and the way we get around the city. We welcome now the man in charge of all that, Janno Lieber, Metropolitan Transportation Authority Chair and CEO. Janno Lieber, thank you so much for being here.
Janno Lieber: Good to be with you.
Westin: Everybody's gonna care about what you have to say right now, everybody's certainly within the New York City area. Let's start though with this so-called congestion pricing. We have this environmental assessment that's come out now that would charge up to $23 I understand for people to come into Lower Manhattan to the lower part, business section. Where are you on that? I mean, where does that process stand and what is your position on it?
Lieber: Well, listen, right now we are going through what is a federally required environmental process, as you said, and what comes out of that process is then going to be evaluated by an expert panel that we created to figure out what the tolls should be and what the exemptions and discounts should be. For example, there's a provision of the law that created congestion pricing that gives a tax credit for low-income people who live in the Lower Manhattan district. So they're gonna have to turn and balance those things. If we give more exemptions for whatever reason, the tolls will be higher. But the bigger issue is we need congestion pricing, because just as climate change is an existential issue for all of us, and this will help us to deal with the pollution and make New York even greener. So is the fundamental existence of a city where you can get around. Right now we are choking on congestion. We cannot get police vehicles, we can't get buses around, we can't get Access-A-Ride, paratransit around. We can't get all that Amazon e-commerce around. So we have to do something about it. The legislature said we were going to do congestion pricing and we're moving towards it in the next year.
Westin: But you’re in favor?
Lieber: Yeah, I mean our role is we have to be somewhat neutral as this environmental process unfolds. But the legislature has made this program part of our Capital Program, it's supposed to fund $15 billion out of our five-year Capital Program so we’re counting on it.
Westin: That’s just where I was gonna go. How does this fit into your business plan overall, as I understand this would raise, we think a billion dollars a year.
Lieber: And David, that billion dollars is meant to be bonded into $15 billion total for our Capital Program. So that pays for maintaining that 100-year-old system, the basic structure. It will pay for buying new subway cars, it will pay for making the whole system ADA accessible, it will pay for electric buses so we have even less pollution. We need that money and we're counting on it.
Westin: No doubt we need a lot at the same time. You've also got an operating expense issue quite apart from that capital issue. You got a big shortfall here. How big is the shortfall?
Lieber: Well I say to people, we're an $18 billion business that lost 40% of its customers. Now we're way up from where we were at the beginning of COVID. At the beginning of COVID we were down 90% on the subways, 95% on the commuter rails and we were losing $200 million dollars a week. Right now we're way up to over 60% of pre-COVID levels, but clearly it's gonna take us a while to get back. We need a new financial plan that will help to fill that gap because transit is really existential for New York.
Westin: So let me ask you, you're up to 60%. That sounds really good, but I'm told that a lot of other big metropolitan subway systems are doing better like Paris, for example. Why is New York behind, is there anything you can do to fix that?
Lieber: In Europe, they are doing a little bit better. They're a little further along in getting people back to work. Look, what happened in New York is people got very accustomed to a lot of remote work. Return to office has been much slower, return to office is only 40%, but we're at 60% because we have so many other New Yorkers who rely on the mass transit system. So not trying to cut our way out of this deficit is really important because transit is like air and water in New York. It's existential, people need it to survive.
Westin: But let me come back to what the hole in your operating budget is outside capital budget. How big is that hole and how much time do you have to plug that hole? There seems to be some urgency to this.
Lieber: The federal government had three COVID Relief bills, the third one, the ARPA bill that President Biden put in motion, and Chuck Schumer really looked after the MTA throughout this whole period, so we ended up with $15 billion. It's a lot of money to fill that hole, but it runs out in 2025 based on our projections, so we do need to find a new plan that will make sure the MTA is funded and we can continue to support the city's economic recovery after 2025. Our proposal is that needs to start in 2023. We think you can actually reduce the structural deficit if the legislature takes action then.
Westin: Well I was gonna say, you can't wait until 2025 in addressing this, you want to start addressing in 2023. That means you’ve got to come up with a plan within the next six months.
Lieber: Yeah, and the first step was what we've done the last few weeks, which is to put out a new assessment of what the financial projections were going to be and what the gap was going to look like. We did that, people are starting to pay attention, we wanted to see that discussion among the policy makers and thought leaders, that's been accomplished. Now by the time the Governor is -- what we expect to be the Governor's reelection – after that the legislature will come back to Albany and we'll start to get into it.
Westin: Anybody who’s run a business, and you're running a really big business now, is that when you have a problem like this, there are a couple of ways to address it and typically you do both to try to raise the revenues, but also cut the costs. What about cost cutting, where could you save some money? And let me ask you something specific – what about service? Could you cut back some? D.C. has a pretty good metro system, they don't run it at night.
Lieber: Well listen, fundamentally we looked at, during COVID, there was a period of time when we were intensely cleaning in the middle of the night. And we actually cut it back and there was an outcry because there are so many people in New York who rely on mass transit because they don't have automobiles. Remember, more than half of New Yorkers don't have access to an automobile. So a lot of folks, who were especially in hospitals and otherwise who were stuck in the late shift said no, we need 24-hour service. It’s kind of in New York City’s DNA. But there are ways to save money in our operations and we are attacking that. I've given our operating teams like hundreds of millions of dollars of goals in different areas. We're going to bring that to the table as part of our discussion with the legislature.
Westin: You mentioned that working from home is hurting your ridership.
Lieber: Yes.
Westin: For those of us who are living in New York and watching the evening news, for example, crime seems to also be deterring people. How big a factor is that? Really because every night almost on the evening news, it feels like we see something happen in the subway, which is pretty scary.
Lieber: Yeah and listen, there have been some really high profile and really alarming crimes that have definitely upset people and changed some folks’ view of transit. But I think that the bigger issue is not that crime has gone up so dramatically, because overwhelmingly, the subway is still a safe place and New York is still the safest big city. But what we're hearing from our riders is it's not just actual crime, it's the sense of disorder, non-compliance with just the everyday rules and also the presence of a lot of folks who are suffering with mental health issues in the public space. That's true on the streets in New York, that's sometimes true in the subway. You know, the issue of mental health and disorder in the system is as big as crime and we're trying to attack it. The Mayor has been great on this issue. The Governor is coming in behind him doing a ton of work on the mental health stuff. I'm optimistic.
Westin: So Janno, finally, put out a bit larger perspective because one of the real goals of so many people in New York City, particularly the business community, is to get people back into the city, get them back into the office. What role does the MTA play in helping get that done?
Lieber: Absolutely. Look, mass transit is one of the things that makes New York affordable, it makes it possible for people to make use of the amazing range of activities and theater and culture and excitement in New York. We want to support the city's economic recovery. I do believe there is value in in-person work. I accept that there may be hybrid work. We're planning for that. But we just need a new economic model because in New York, unlike many other places, as I said, mass transit is existential. You cannot in a city of this density, which is twice Boston, Chicago, and nine times the density of a place like Houston, you have to have mass transit and it needs to operate regularly. And we have to fund it.
Westin: Mr. Lieber, thank you so much for spending time with us. I really appreciate it. That’s Janno Lieber, he is Metropolitan Transportation Authority Chair and CEO.