Following a pause to the congestion pricing program, MTA Chair and CEO Janno Lieber made an announcement and took questions from the press.
A transcript appears below.
MTA Chair and CEO Janno Lieber: Thank you to everyone for joining us on short notice. So, no secret, last week was incredibly difficult. Five years ago, New York state passed a law requiring MTA to implement congestion pricing in Manhattan.
We entered the federal government's value pricing tolling program, the so-called V Triple P and for the past 1,800 days, staff at the MTA and our partners in New York City D.O.T. and New York State D.O.T. have been working with the feds to take all the steps required to implement this groundbreaking program.
It's been a huge undertaking, and I really need to thank everybody on Team MTA and on our partner teams who's been involved and has worked so tirelessly to get us to this point.
Thanks also to the partners at the Federal Highway Administration. They're the U.S. D.O.T. professionals who manage the federal side of this program, and they've been incredibly hardworking and professional throughout.
So, what now?
Since the governor's video announcement last Wednesday, and since the conclusion of the legislative session on Friday, there have been a lot of questions and concerns. As much as I want to understand, our job at the MTA is not to be political analysts. As I've said before, the governor plays on a statewide and national field. And sometimes that means we don't look at things exactly the same.
But today, instead, I want to talk about the next steps that we at the MTA are taking and must take to make sure that our riders; the 6 million plus New Yorkers who depend on the MTA every day, to make sure that they don't suffer impacts from disinvestment in public transit. So, what do we know?
First, as I always say, for New Yorkers, mass transit is like air and water we need it to survive. New York City and our 23 million population-region only works because we can move millions of people. 90% of the people coming to the CBD are taking transit. We can move all those people around quickly without the use of private automobiles. There just ain't enough room on the streets. We are the densest place in North America, and that allows the New York region to be an incredible economic powerhouse. We are 10% of the national GDP.
Second, we know we have to keep the system running. As I said before, I give kudos to Governor Hochul for supporting transit especially for stepping up along with the state legislature last year in 2023 to shape a new operating budget for the post-COVID era. That was a huge positive step.
Third, we need to keep capital investment going to make sure that the system is reliable and convenient for everybody.
MTA Construction and Development under Jaime Torres Springer has done an amazing job these last few years, knocking out projects as we say faster, better, and cheaper than ever before, even during the pandemic. Projects like the L train tunnel, the Long Island Railroad third track, the Penn Station Corridor project, all of the ADA station projects, have come in under budget ahead of schedule or in many cases, both. We need to keep making these kinds of investments and keep making progress on both the current capital program 2020 to 2024, which is the one impacted by the congestion pricing issue, but also on the next capital program which is coming a few months in the future. I've spoken to our elected leaders, the mayor, leaders in the legislature, congressmen about the prioritization of MTA for the region, and everybody agrees we can't let go of the progress that we've made.
And finally, we need to be honest, traffic is only getting worse. Sam Schwartz told me last week that traffic is actually measurably slower than it has ever been in his entire career. Sam Schwartz, Gridlock Sam, the expert on our traffic in New York City, notes that it is slower than any time since he began tracking it in the 1970s.
So, with all that context, let's talk about our next steps. I'm focused on three key areas. How do last week's developments impact on the MTA Capital Program, how do they impact operations, and how do we manage our obligations under the 2019 state law, creating the congestion pricing program?
One: on capital funding we are going to do now we have to do an intensive review about the best way to reprioritize and shrink the current 2020 to 2024 MTA Capital Program. This is not something we do lightly, but we simply cannot award contracts without dedicated funding in place. That's where we are. So, here's what we're doing because we are actually moving forward, and it has to be done in a serious manner. Deputy Chief Development Officer Tim Mulligan is going to lead the effort to, as I say, reprioritize, re-sequence, and shrink the current MTA capital program. And the first step in that is going to be a substantive report on progress at the board meeting we're having on the 26th of June.
As part of this reordering, we have to prioritize the state of good repair work that assures the safety of our transit system. This is the basic stuff to make sure that the system doesn't fall apart. We call that state of good repair work. I have asked a legendary safety professional, former MTA Chair Tom Prendergast, to help us with this effort because as we go through all of the projects, we need to focus on those that are most important to maintaining the safety of the system.
I'm also paying special attention to our federal funding situation, and how do we preserve the grants that have already been awarded, including the Second Avenue Subway phase two grant.
Our team at the MTA, along with the folks at U.S. D.O.T., did amazing work to land that $3.4 billion commitment, and we're going to do our best to prevent it being put at risk, though, that is a challenge.
Next, I've asked Special Advisor for federal policy, Naomi Renek, who led our efforts during the whole COVID relief collaboration with the Congress, Naomi's gonna focus on how do we preserve our federal grants and manage this entire exercise.
I've also, in that connection, spoken with majority leader Schumer, representatives Nadler, Goldman, Torres, and others, all of them are committed to helping us make sure that we minimize the impact on the federal funding for the MTA. We don't want to lose that funding. Although there are some real complexities right now.
Next, Quemuel Arroyo, our Chief Accessibility Officer and a senior adviser to me, is going to work with our team and also with the ADA disability community to make sure that we squeeze out as much station accessibility work as possible, notwithstanding the shrinkage of our existing program. Our commitments that we made to the disability community as part of that legal settlement a couple of years ago, do have provisions in them for downside scenarios, but we want this to be a collaborative exercise, and I want Quemuel to work intensively for them as we figure out what we can do, which is going to be less, and what we prioritize.
Operations. The deputy CFO of the MTA Jai Patel is going to lead a review of the operating budget to identify impacts from the loss of congestion pricing revenue to the capital program. This is complicated, but if we are borrowing money earlier to make up for the money we don't have, that has impact on the operating budget because that debt service goes over to operating. There are a lot of MTA employees who are paid in large part or in part out of the capital program. So, we have to figure out how the operating budget is going to be impacted as we adjust the capital program as well. And let me tell you, the priority is throughout that we're gonna fight like hell to make sure we don't have to reduce service. That has been an area of incredible progress in the last couple of years. We have actually grown service on subway lines, on bus lines, especially on commuter rail, and we don't want to lose that. So, we're gonna focus on the financial situation and how to minimize those impacts.
And finally, where we are with respect to the congestion pricing program. I think folks understand that the MTA cannot start the congestion pricing program, notwithstanding the state law, without a New York State D.O.T. sign off. They are one of the three applicants to the federal government for authority to actually start the program.
I anticipate the status of this application and this whole issue about signing on to the federal program will be a topic of discussion at this month's board meeting because it is something that my board is intensely focused on.
But I have to emphasize we are going to continue to defend the federal lawsuits against the FONSI, the federal approval that was given to us in 2023. And also, we're going to continue to defend all the other claims that have been set forth in the various lawsuits. And we're going to make sure that we keep moving forward on the details of the congestion pricing program because there's always some more software to be worked on. But otherwise, to make sure that we're ready if and when we get the green light. And as folks know, Juliette Michaelson of my team has been leading the congestion pricing effort in general along with her colleague, Dr. Allison C de Cerreño, who has been at this for years, and they're going to oversee, again, the congestion pricing related work. Bottom line, this phase of the MTA’s work is a huge challenge, and I have a great team that is going to be laser focused on working on this.
It may feel right now like things are a little crazy and even that there's a crisis, but we need to stay focused so that we can maximize the situation for our riders. They are our focus right now. That is where our heads are at. Apropos of that, listen, I grew up in New York in the 1970s when the transit system was in the toilet. We got where we are today by taking on real problems. Brave leaders like Dick Ravitch and Bob Kiley and many others who worked with them, brought us from a system where you got on and you didn't know if the train was going to break down before you got there to what we have today, which is a pretty great system, and we have to be willing to do the work in hard times and as well as in the better times to make sure we continue to make progress, and we protect the gains that we always have made.
And I want to say that to folks who are upset that after years of work and being so close to the idea of actually managing street traffic, and with that development, hopefully getting cleaner air, less traffic, safer streets and better transit -- the goals of the congestion pricing program -- I want to say to the folks who are frustrated that this reversal took place, I can relate. And I want to emphasize, I am incredibly moved by how New Yorkers, transit advocates but regular New Yorkers as well, have turned out in full force and raised their voices to show support for transit and for the MTA.
Loving the MTA is not a 365 job for New Yorkers, but in the last week, we have felt it, and I want to acknowledge that. So, everybody knows that no matter what, political crisis, pandemic, massive weather event, our work at the MTA continues.
And just a few points of light in a challenging moment. Last Wednesday, in the middle of all the noise, we carried more than four million people on the subways as we have done routinely for many months. And that same day, we had a post-COVID record on the Long Island Railroad, 264,000 riders.
Last week, thousands and thousands of people got out to Long Island to witness that amazing cricket competition. The final was between India and Pakistan. And that was a huge, huge effort. And it was possible for all those people to get to the stadium on the Long Island Railroad. Why? Because we built a third track project which people have been talking about for 50 years. We finally got it done, and that was the reason we could accommodate that amazing event.
And the just this past weekend, while again so much public discussion is going on, MTA Construction and Development took a major step towards replacing the Park Avenue Viaduct. That’s that structure north of 97th Street, all the way up to the Bronx, which carries 98 percent of Metro-North traffic, and it’s falling apart. MTA Construction & Development is taking an incredibly innovative construction approach, started a project that’s going to be done three times as fast than it would be otherwise and without any interruption of service. This is the L train of Metro-North, an amazing, amazing step for our construction team. That is the new MTA, and we’re going to keep at it. So, all of this is, as I say, mass transit is too important to the city and to this 23-million-person region to go backward. We’re not going to let that happen, and now I’m ready to take some questions.
Katie Honan, The City: I wanted to ask, do you and the MTA board feel you have the legal room to continue with the congestion pricing plan, regardless of the Governor's announcement? Additionally, given what appears to be a lack of communication from her office to you and the board, do you feel a little bit like a sucker?
Lieber: The substantive question you ask is really simple, which is the value pricing, the federal approval, is what's needed in order to initiate congestion pricing. The governor’s been very upfront about the fact that ain't coming at this time, from the State of New York. They're not going to sign off on it, and, therefore, we're stuck. But we are still, everybody at the MTA Board recognizes that we're still subject to the state law that says congestion pricing needs to be implemented. It's just that at this moment, the mechanism to get it done, the federal approval that is required, can't be obtained.
Honan: The second part was substantive. I mean, you didn't have any communication and seemed you and the board found out about it the way we did in the press. So, what have your conversations been like with Governor Hochul since because it seems like it was sort of disrespectful to not alert you and the board. You have to find out about it I guess in Politico.
Lieber: Listen, I don't want to characterize private conversations with the governor, I found out about her final decision late the night before. And we're an operating agency. We're an implementation agency, and we're focused on, as I've described to you today, how do we make sure that the system continues to function as well as possible?
Andrew Siff, WNBC-4: Mr. Chairman, just following up on Katie's question, did you at all over the last five days entertain the thought of resigning in protest for what the governor has done?
Lieber: Listen, Andrew, I think you and I have known each other longer than I've been at MTA, so you know I spent 14 years on the World Trade Center Project. I'm the patron saint of challenging projects and challenging causes. So, it's not in my nature to walk or to quit. And, honestly, the perspective I have is of someone who saw what it took to get the system where it is now from the depths of the 1970s and early 1980s. So, people did a lot of hard work in hard times. And, I couldn't possibly justify walking away because of a single setback. Even one of this magnitude.
Siff: The MTA put out a statement Friday night, just as a quick follow up, saying that projects are already going to be de prioritized including electric buses, certain key ADA projects. Today, the governor said all the projects are going forward. It's just a question of identifying a different means of funding. Those two things can't both be true. They're either de prioritized or going forward.
Lieber: Listen, Andrew, I don't know exactly what she said. But, the point that you made at the end is the right one, which is we need the funding in order to move forward.
Ana Ley, New York Times: Can you talk about what this says about the ability of the MTA to carry out ambitious projects, and what does this say sort of about mass transit at large, you know, if this program can't work here, the most walkable city in the country, is there any hope for working elsewhere?
Lieber: To your point, it’s like definitely we are we are meant to lead in the area of mass transit and the era of urban planning because of our density and because of the way that mass transit is essential to our economy and our way of life. So, I don't disagree with you that the rest of the country is watching and folks who are struggling with in other places, who are struggling with the damage that congestion and air quality problems are doing to their cities, are looking to us for leadership. I don't disagree with that. But I don't think that this episode says anything negative as your question may have suggested about the MTA. We got the job done, an amazing effort. You've heard before; a 4,000-page, four-year environmental review that received an A plus from the federal government, a ton of planning that went into getting ready for implementation and turning on the system. The fact that the physical assets that are central to the system are actually operable right now. The cameras are on, and we're taking information about traffic. I think it's a credit to the MTA rather than a demerit.
Michelle Kaske, Bloomberg: Hi, Janno. Back in November, your CFO Kevin Willens mentioned that the risk with congestion pricing to the operating budget was that there's a potential that it could increase the MTA’s borrowing costs by about $300 million every year. That would be again $300 million that would need to come from the operating budget for borrowing costs. Is that number still the risk that you that you see now? Has it grown? Has it decreased?
Lieber: I want to give you an IOU to confirm that specific number. But the issue I think you're talking about is right, which is that we have to borrow the money earlier, then we can't make up money we don't have. But, if we have to activate our borrowing earlier, it adds to the operating budget. The debt service goes on the operating budget. But I'll have to check with the exact numbers. You know, on the municipal finance front, there was a credit watch I believe, right, that’s been it's been issued by…..
MTA Chief Financial Officer Kevin Willens: Negative. Yeah, both Moody's and S&P indicated that the lack of congestion pricing was credit negative for MTA. They haven't changed our ratings or put us on a formal watch, but they commented on the negative credit implications.
Lieber: We'll check the exact number and come back to you.
Kaske: And just so I better understand that those higher borrowing costs that really comes from needing to sell transportation revenue bonds as opposed to what would have been congestion pricing bonds?
Lieber: Or to sell them earlier.
Samantha Liebman, NY1: Hi, Janno. So, did the governor give you assurances that this was just a pause? Have you discussed possible restart dates and or possible tweaks to the pricing scheme?
Lieber: I think you should address any questions about where do we go from here on congestion pricing to the governor's office because, clearly, they are the actor in that respect. I'll just say we at the MTA aren't giving up on congestion pricing, not at all.
Liebman: And what if it doesn't go forward? What happens with the tolling infrastructure?
Lieber: TBD.
Dave Colon, Streetsblog: Got a couple for you. One is the governor has been talking about new financial resources for the MTA to replace the congestion pricing revenue. Congestion pricing has had a coalition that stretches from the Partnership for New York City to the DSA. So, what do you see out there that could possibly make the same popular coalition. And the other is, has the federal government told you that they completed the final review of the EA now that you had given the actual tolling numbers to them?
Lieber: Okay, on that question, you have to you have to address it to the feds. Because we had not received the final reevaluation. So, you have to address that question to them. And I'm not going to speculate about the political coalition. There are a lot of people who were trying to get replacement money through the legislature last week, it didn't happen. And now, as we've talked about today, we're living in the world of how do we make adjustments because we don't take action based on hope and speculation about, you know, billion-dollar numbers, we have to take action based on the facts on the ground.
Evan Simko-Bednarski, NY Daily News: Janno, so you mentioned earlier, the 70s, the 80s, the bad old days, four-digit mean distance between failures. I want to ask the opposite question that Ana asked, which is what is it going to cost, the state of good repair is a large part of this capital budget and assumed to be a large part of the next one. What is it going to cost to keep the system as it is functioning for New Yorkers?
Lieber: You know, it's a good question because state of good repair is held up as kind of a goal, it's not always well defined. First of all, we have to invest significantly to maintain the system as it is today. So, roughly 70 to 75 percent, I believe, of our current capital program is state of good repair. And that's the stuff like the basic structure, the concrete structure, the steel, the elevated structures, making sure they are painted, so that they don't rust and develop weakness. Signals, track, power. All of the basics that people don't see even when they're standing on a platform. Make sure that you're investing in both new rolling stock, new subway cars, but also maintaining the existing ones. Making sure that we have shops in yards that are in decent condition, so we can maintain the fleet of subway cars. Making sure that the depots are in decent shape, so that our bus drivers, that we can quickly maintain and efficiently maintain. So, this very basic stuff, it's not always sexy, but 70 to 75 percent of the capital program, is that. Going forward, we've obviously been continuing to invest in great things that are improvements, Evan, you know, all this stuff. It's not just ADA accessibility for five times as many stations as the MTA used to do in in a year or a capital program. It's making sure we have modern signals, so we can actually run more trains close together and have great service like we do on the L train, like we do on the 7 train, for the rest of the system. It's getting zero emissions, buses, electric buses, maybe hydrogen powered in the future. So those are all improvements. Now we have to double down to make sure that 70 percent of the capital program is funded, and we're probably not going to be able to do all of the state of good repair work, so we have to prioritize. That's why I'm asking Tom Prendergast to come look over our shoulder, make sure that we're investing if we can't do all the state of good repair work, that we're at least doing the stuff that is most safety sensitive.
Going forward, Evan, you could probably expect that a capital program in the future, you can do the math, and, you know, what has inflation done to the current $51 and a half or $52 billion MTA capital program? What would have to be in the future to keep making progress on state of good repair. And that's even before we think about all the things we want to do, like the Interborough Express, and many, many other expansion projects that are talked about. We’ve got a tall order, and we're behind the eight ball right now. And that's why we're taking these frankly, very serious steps to carve up the capital program and make sure we don't let the system fall into disrepair back into the 70’s and 80’s.
Tim Minton, MTA Communications Director: Alright, thanks Janno, thank you Kevin, thanks everybody. Good afternoon from Lower Manhattan.