MTA Chair and CEO Janno Lieber appeared on WABC-7's Up Close with Bill Ritter this morning to discuss transit related issues.
A transcript of the interview appears below.
Bill Ritter: It's not just the biggest transit agency. It's also the most critical. The MTA, with its subways and buses and commuter trains carrying commuters to and from jobs and homes and schools and, well, just about everywhere. The hard truth: the pandemic was something of a disaster for the MTA in terms of number of passengers. This city and this transit agency have really not recovered yet. Ridership on the subways still way below pre-pandemic levels. Yes, the fear of crime also played a role, but crime underground is dropping. We told you that before. And now, the MTA, which is required to balance its budget, is admitting that's going to be a difficult thing. To his credit, the man in charge is our first guest this morning, Janno Lieber, Chairman and CEO of the MTA, and he is here to make his case. Mr. Lieber, thank you for joining.
Janno Lieber: Good to be with you, Bill.
Ritter: Finally, after all these Zoom interviews.
Ritter: And finally, in-person, good to see you.
Ritter: So, how big a problem financially is the MTA in?
Lieber: Well, you said it, you said it exactly right. What happened was during, we are recovering from COVID, and the trends have been positive in terms of ridership, but we're still a third short of our pre-COVID ridership. And that has blown a roughly $2 billion hole in the MTA’s budget. And what I have said is, we don't want to cut service. We don't want a massive fare hike. It wouldn't be fair to the people, most of them working and middle-class New Yorkers who have been riding through COVID, who are now riding at 90% levels, 80% levels relative to pre-COVID. Because to cut their service or dramatically raise fares, because more affluent New Yorkers can telecommute. That's what's going on. And I have called on Washington, Albany, and City Hall who all have a role to play to come together and find a solution to this $2 billion budget deficit.
Ritter: Before we get into the weeds financially speaking, you did get money from the Federal government.
Ritter: There was a bailout. How much was it?
Lieber: It was $15 billion. And now we're down to about $5 billion of it. The burn rate because it was, it was filling the hole in the budget created by that reduction in ridership, the burn rate on that federal money is about $200 million a month. So, if we don't come up with a solution, it's all going to be gone in basically two years. So, we have to find a solution now. That's why I'm calling on Albany, Washington, and City Hall, as I said, to come together and help us formulate a solution that is a long run solution. So, we don't have this existential crisis.
Ritter: You once told me, Janno, that you know, you did dream as a kid to be the head of the MTA, and here you found yourself there. But this is not the role that I assume you envisioned? Because you've become, a lot of your work is fundraising basically.
Lieber: Listen, if you care about the city, you care about transit. As I always say, transit for New Yorkers is like air and water. We need it to survive. So, we're going to save the MTA. We're going to make sure that for the New Yorkers who depend on it, principally working and middle-class New Yorkers who can't afford a $50 Uber, who don't live so close to their office buildings that they could walk or take a Citi bike, that we're going to make sure that transit is here. I'm proud to be here at that moment.
Ritter: You mentioned before I get into the weeds, you mentioned that a lot of affluent New Yorkers who are living here, not in the city, but somewhere else are telecommuting, they're not riding the subways. Some of them are also driving. And that's creating congestion and you did talk about, you did push for congestion pricing. I don't know where that is right now. We'd like to get your take on that.
Lieber: Listen, you know, I want to be clear that when I say that affluent New Yorkers are, it's not just our brothers and sisters in suburbia, actually the commuter rail ridership is about the same as the subway. A lot of it is right here in Manhattan, where people do have an option to walk to work. And you have the folks who are doing the most telecommuting right here in Manhattan. But to your point about congestion pricing, listen, congestion pricing is the right thing to do not because you want to tax anybody, but because our, you know our fire trucks can't get to fires, ambulances can't get to hospitals. We have a congestion problem that is existential, and that's the right way to deal with it.
Ritter: During our political interviews with people running for office, no matter what their party, they all said Janno Lieber is just trying to raise money. It's not about traffic.
Lieber: Well, you can say what they will. But just remember that, those folks, a lot of those folks also are very clear on the record that they're against, they want to do something about climate change. This is a very, very strong and progressive pro-climate change action initiative. Everybody has been talking about it for a million years. It's time to do it. New York is the place where we really need, we don't have room for more cars. So, we have to do something to make sure that the buses can get around, that the that the ambulances can get around. That the paratransit vehicles, that the Amazon vehicles that we depend on for all of our economy can get around. What we don't need is more single occupancy vehicles with one person driving. And by the way, that's a rich person's game, to drive to the Central Business District and pay 50 bucks for parking. I'm not as concerned about that as I'm about preserving transit for New Yorkers who depend on it.
Ritter: Talk to me about the people who are not coming on the subway because they're fearful of crime. Crime has gone down in the transit in the last –
Lieber: Thank you for mentioning it.
Ritter: Well, no, it's we report the facts. No matter where they fall. It has gone down. You will now have a new change of leadership. A new transit chief is coming in. The one who exists right now is retiring, Jason Wilcox. And you, just this week, we heard you have a new chief of transit. And I assume you work pretty closely with them.
Lieber: Yeah, absolutely. The NYPD has been great. What happened a couple of weeks ago, I don't want folks to forget, is that the Governor and Mayor stepped to the podium, announced that we're putting 1,200 more cops into the transit system. And lo and behold, the month that followed, transit crime went down 13%. We're actually, in the month of November, we had a couple of weeks where we had the lowest rate of crimes per million riders that we've had since before COVID. This is by no means time to declare victory, but we're in the right direction. The NYPD has been great and we're going to keep working with them.
Ritter: And his retirement, Jason Wilcox?
Lieber: We work closely with Wilcox because he leads the Transit Bureau which is the NYPD force that's in the transit system, in the subway system, so we have to work closely with him. The collaboration has been great, but the more important collaboration is with Mayor Adams who's passionate about subway safety. He's an ex-transit cop.
Ritter: All right. One of the slogans we have in the newsroom is numbers in news tend to confuse, but we're going to talk about numbers. $2.75 is the standard fare for the New York subway system. What you propose, what it seemed like you were proposing was a slight increase to $2.90. What is the real cost? If you were to just say, people have to pay for everything? Here's what the fare should be to meet our costs. What would that be?
Lieber: Well, you know, interestingly, the subway is the least, is the system that pays for itself the most after that is buses. And the subsidy is greatest actually on the commuter railroads on a percentage on a $1 basis. So, but the point is that everybody deserves mass transit service. It's like police, fire, and sanitation. We shouldn't judge it solely by what it costs. It's, that's a part of it. In terms of what it costs the whole government, we need to provide it just as we need police, fire, and sanitation. That's why I call it essential to us. That's the way I look at it.
Ritter: Okay. That said roughly, what would it cost in real in real money?
Lieber: Yeah, I mean, listen, our, the subsidy, our, before COVID, we were paying about 55% of our operating budget from fares and tolls. That number is down in the 35% to 37% range now. So, we've, the percentage, what we're saying is, the fares and tolls used to cover more than half, that was more than any other transit system in America, more than any other. Now, especially in New York, we need to subsidize transit and contribute to it from general government revenues or otherwise to the extent needed to provide that service because it's existential for New Yorkers.
Ritter: Okay. I assume not everyone on your board and not all of your executives would say, we all agree on what the what the fare should be.
Ritter: What is it? What's the range?
Ritter: Four dollar fare?
Lieber: No, no. What I think our board, I think there's a pretty strong consensus that what we ought to do is if we have to go back to the 4% or 5% increases that we did every two years, so it was like 2% a year just to keep up barely with inflation. That might be appropriate. And, you know, we put it off thanks to Governor Hochul, for a couple of years. But what we don't want to see is a massive fare increase that starts to push people out of the system in terms of affordability, and that's why we're going to Washington, Albany, and City Hall.
Ritter: You know, that some of your critics say, and they've always said since I moved here, they said it. The MTA is a bloated, you know management system. Is it bloated?
Lieber: Well, listen 80% of our costs go to wages, pensions, and health care. It's the labor, it's the workforce that you're paying for. It's the people who drive the buses, who drive the trains, the conductors, the people who clean, the people who do the maintenance on all these vehicles and all these trains, that's what the system costs. Now, with that said, when we work with our unions at the collective bargaining table, we are asking for, we will continue to ask for ways to make us more efficient, that we're delivering the same product for less money, same service for less money. But it's really about paying for labor, and I'm not ashamed of that.
Ritter: And does that mean that, you know, when you talk about possible cuts in service and possible cuts in the in the workforce? That's what you're talking about?
Lieber: But listen, what that is a very important point Bill, which is that when we talk, we talked about, what we don't want to happen and why we're going to the government leaders for solutions is don’t want to cut service. Don't want to raise fares dramatically, and we don't want to lose our workforce because that starts to impact on the quality of service. Remember, 2017, the summer of hell, after the financial crisis, there was a pattern of disinvestment in the MTA. And we stopped maintaining basic systems, this is a trillion dollar asset and needs to be maintained. We paid a price in 2017. We don't want to go back there.
Ritter: We have about 30 seconds left for you to answer this question. You could talk about it for an hour. Fare beaters, half a billion dollars a year in revenue you lose. To be honest, I pull out my MetroCard when I see someone go there, I say hey, you just got your picture taken I'm going to let you in because I don't want you to be a criminal. How big a problem is it and what can you do about it?
Lieber: It is, you’re right. It's a significant problem. It grew during COVID. Maybe there was a sense of like the rules were off during COVID. But the problem grew. $500 million a year is going down the drain to fare beating. So, what I would, number one thing that I want to do is to restore a sense of fairness. We don't want to put anybody in jail, especially kids who make dumb choices sometimes. But the idea that a hard-working New Yorker is swiping as you described and somebody else's going through that fare gate, not fair, makes people feel like suckers. So, we got to redesign the fare system so that gate doesn't continue being the superhighway of fare evasion. And we have to create a more, a better, fairer enforcement system, including making sure that people who really are poor who, you know have discounts on the system. There's a City program called Fair Fares, we want people to use it.
Ritter: Last quick question. How much will fares go up do you think? A year from now you come back on this program?
Lieber: What we said is it a month, this is really up to the Governor, Mayor, and Washington. We propose something that would be like a 5% increase. That to be just, yeah.
Lieber: That's somewhere north of $2.75 to $3.
Ritter: Janno Lieber, thank you, sir, for making your case. We are all depending on it, and it affects everyone.