A stalemate between New York and New Jersey on how to divvy up federal coronavirus relief funds for public transit may force New York City subway system to borrow as much as $4 billion in short-term debt to cover operating costs.
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The New Jersey Metropolitan Transportation Authority, the largest federal transit system in the U.S., is considering issuing the short-term debt as officials work to resolve a dispute with New York about federal funds allocated to the region s mass transit providers and issuing the debt now for post-tax bills. Congress approved the funding for the region in two Coronavirus relief packages and that states were responsible for dividing up the money.
The regional allocation, what s called the "whacking up between the states of New York, New Jersey and Connecticut", is not resolved and due to that continuing issue we need money sooner, Pat McCoy, MTA's deputy head of financial services, said Monday during the agency s monthly finance committee meeting.
The standoff is delaying the MTA s receipt of $10.5 billion of federal aid that it needs to cover lost revenue during the pandemic when subway ridership plunged by as much as 90%. The states must decide how to allocate the funds by Nov. 8 to participate in a $2.2 billion pot of federal discretionary funds for mass transit systems hit hardest by Covid.
We expect resolution soon, McCoy said. I would anticipate by Nov. 8 because that is when we need to file application papers for the $2.2 billion - Competitive or discretionary grant for coronavirus support. MTA s Finance Committee approved the borrowing on Monday. The agency s full board is set to weigh in on the monthly short-term debt on Wednesday during its monthly meeting.
New Jersey's allocation formula would shortchange New York by $810 million, including $730 million for MTA, the agency said.
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