(Reuters) – The New York Metropolitan Transportation Authority (MTA) on Wednesday approved up to $ 2.9 billion in borrowing from a Federal Reserve loan program to add to its coronavirus-stricken budget support.
The new borrowing, following a $ 450.7 million MTA loan from the Fed’s Municipal Liquidity Facility (MLF) in August, would enable the agency to close its current fiscal year on a balanced budget, officials said .
The MTA faces a projected deficit of nearly $ 16 billion through 2024 due to a sharp drop in the number of passengers on its buses, subways, and trains amid the pandemic, and is considering tariff and toll changes, massive service cuts, and laying off more than 9,300 employees.
“That’s just ugly,” said MTA CFO Robert Foran. “We have to consider that in order to survive.”
The country’s largest public transportation network, which has been pushing for $ 12 billion in federal virus aid, is due to vote on its 2021 budget next month.
The MTA and Illinois, which took out a $ 1.2 billion loan in June, were the only two users of the MLF as of late October. Illinois could also turn to the MLF again to help tackle a budget deficit of $ 3.9 billion.
New Jersey, which was considering an MLF loan option to fill a $ 4.28 billion revenue gap, instead sold $ 3.67 billion in bonds in the U.S. municipal market on Tuesday .
The $ 500 billion MLF, which the Fed approved in April and slated to expire on December 31, was designed as a backstop to the muni market by giving states and local governments access to short-term cash flow loans.
It is one of around a dozen emergency credit facilities the central bank set up this year to help mitigate the blow from the pandemic.
Reporting by Karen Pierog in Chicago; Editing by Chris Reese and Chizu Nomiyama