NYS Office of the Comptroller - DiNapoli: MTA Avoided A Fiscal Crisis, Now It Has To Convince Riders To Come Back

 

With Funds On Hand to Plug Budget Gaps, MTA Must Focus On Creating an Efficient, On-Time, and Safe Transit System

In a turnaround from the fiscal crisis it faced a year ago, the Metropolitan Transportation Authority (MTA) today stands on firmer financial ground, largely because the state budget provided dedicated sources of revenue to close projected budget gaps, according to New York State Comptroller Thomas P. DiNapoli’s annual report on the MTA’s fiscal outlook. With this improved financial picture, the burden is now on the MTA to improve the region’s transit system and win riders back, while keeping its budget balanced, DiNapoli’s analysis concludes.

“Some risks remain, but an influx of new funding has helped the MTA shore up its finances,” DiNapoli said. “This newfound fiscal stability gives the MTA the opportunity to make improvements that will ensure a safe, clean and on time transit system that riders want to use. If riders don’t continue to come back, the MTA risks returning to its all too familiar cycles of crisis.”

Revenues and Expenditures

At the start of 2023, the MTA faced a $600 million budget shortfall for the year with gaps of more than $1 billion in 2024 that could have ballooned to $1.6 billion in 2026. With new funds made available by the state and city, particularly the addition of over $1 billion annually from an increase in the Payroll Mobility Tax on large New York City employers, the MTA has balanced budgets throughout its five-year financial plan through 2027.

MTA projects its overall revenue will increase by 4.4% annually over the five-year plan, largely fueled by rising tax revenue, which the MTA expects will increase an average of 6.6% annually.

Dedicated state taxes provide more than 44% of MTA’s revenue in 2024, up from 37% in 2019, making up for the drop in ridership revenue brought on by the pandemic. Fares (26%) and tolls (13%) will combine to make up 39% of the MTA’s revenue in 2024, well below 2019 when they brought in more than half of the total.

Farebox revenue exceeded the MTA’s expectations by $36 million through August, fueled by ridership gains which could provide budget relief if the trend continues.

MTA’s increased spending, rising an average of 4% annually from 2023 through 2027 is partially driven by an 8% increase in health and welfare costs for active employees and retirees. As in past years, personnel costs, including payroll, health, and other benefit costs, are the greatest expense, comprising 60% of the MTA’s 2024 spending.

Risks

The greatest potential fiscal risk to the MTA would be a recession that the MTA estimates could reduce its dedicated tax revenue by anywhere from $250 million to $750 million a year and reduce ridership. MTA is also relying on revenue from planned downstate casinos to provide $500 million in each of 2026 and 2027. Any delay in the casinos’ approval could throw the Authority’s budget off-track.

In addition to the risks that the MTA has identified, OSC projects that other risks could increase the MTA’s budget gaps by as much as $594 million in 2027. For example, the MTA has yet to identify how it will achieve all of the $500 million in annual savings by 2025 that is built into its budget. DiNapoli’s report urges MTA to finalize those savings plans before the end of 2023 and explain to riders what impact the savings may have on service.

Overtime costs in 2023 will likely be $200 million higher than planned, with the risk declining to $75 million above the MTA’s projections in 2027. Potentially offsetting this cost over the plan period is the hiring of operational and maintenance positions, which has exceeded separations in 20 of the last 25 months.

Ridership

The MTA projects it will reach 69% of pre-pandemic ridership in 2023 and 80% by the end of 2026. The consequences of slower ridership recovery can be steep. Each drop of 5% in anticipated rider recovery means $325 million less in annual revenue.

NYC Transit has set a target for 70% rider satisfaction by 2024, a metric that has improved since last year but has also slipped in recent months. 

The percentage of scheduled service that was delivered in July 2023 was 94%, better than July 2022 (91%), but still worse than pre-pandemic service in July 2019 (96%). Lower service levels, DiNapoli’s report notes, can hinder ridership recovery.

DiNapoli’s report notes that if the Authority fails to bring riders back, it will once again face fiscal pressures that could lead to higher-than-projected fares, reductions to service, or disinvestment in the system.

Capital and Debt

It is currently uncertain how large the MTA’s 2025-2029 capital program will be or how it will be funded.  The MTA is set to present its 20-year needs assessment this month. DiNapoli has called for the MTA to provide greater detail in the assessment to inform the selection of projects in the 2025-2029 capital program and its progress toward improving performance and resilience of the system.

The MTA was initially to start getting revenue from congestion pricing in 2021, which is now slated to start in mid-2024. Any additional delay could create a large shortfall in funds for the MTA’s 2020-2024 capital program, delay needed projects and increase pressure on the 2025-2029 capital program.

The report also notes that the MTA’s debt burden could significantly increase depending on how it funds its next capital program. If the MTA issues the same amount of debt backed by its operating budget as it did for the 2020-2024 capital program and it also covers half of the $25 billion funded by the capital lockbox bonding, a total of $23.5 billion, debt service costs could rise by $1.5 billion by 2037.

Report:

Financial Outlook for the Metropolitan Transportation Authority

Other References:

A Review of Capital Needs and Resilience at the MTA (December 2021)

Annual Update: Metropolitan Transportation Authority’s Debt Profile (May 2023)

MAYOR ADAMS’ STATEMENT ON STRONG GROWTH IN 2023 MATH AND ENGLISH LANGUAGE ARTS TEST SCORES, CLOSING OF RACIAL LEARNING GAP

 

New York City Mayor Eric Adams today released the following statement after the New York City Department of Education released 2023 test scores showing strong growth in math and English language arts (ELA):

 

“We are elated to see strong growth under this administration’s first full school year. As a student I struggled with an undiagnosed disability, so I know firsthand how the right support at school can change a student’s trajectory. That’s why we introduced critical investments like dyslexia screenings, NYC Reads, and more to ensure students are provided with the tools needed to unlock their true potential. This is only the beginning. The work continues under this administration and the leadership of Chancellor Banks to reinvent public education in New York City.”

 

Math test score proficiency increased from 37.9 percent in 2022 to 49.9 percent in 2023. During that same period, ELA proficiency increased from 49 percent to 51.7 percent.

 

The disparity between Black and white students in ELA also declined between 2022 and 2023. Black students increased proficiency by 13.8 percent in math and 4.5 percent in ELA, reducing the gap with white students by 2.1 percent and 2.2 percent, respectively.

 

A summary of the state test results and data is available online.

Developers Reveal Plans To Redevelop The Shuddered Galleria Mall In White Plains

 

Seven months after the Galleria Mall in White Plains closed its doors, developers have revealed a seven-building residential complex to replace the shuddered building. The development team includes Pacific Retail Capital Partners (PRCP), The Cappelli Organization, SL Green Realty Corporation, and Aareal Bank.

Annemarie Plenge, executive vice president of design for PRCP, is the master architectural designer of the project and is working in collaboration with Gensler, Kimley Horn, and Eric Rain Landscape Architecture.

Plans to construct the complex, officially known as The District at Galleria, are currently under review by The White Plains Common Council. If approved, the complex would create up to 3,200 apartments, including around 384 affordable housing units, a quarter-mile-long pedestrian promenade, pet playgrounds, grocery stores, restaurants, and local retail.

Rendering of the Main Street Plaza at District Galleria

Rendering of District Galleria’s open plaza

Rendering of the District Galleria food hall’s lower level

Preliminary renderings of the complex show a mix of structures with varying heights, massing, and façades surrounding a lush outdoor plaza. Many of the restaurants will be housed within a food hall that will feature a mix of fast casual businesses and communal seating. To create a neighborhood setting, the central plaza will have spaces for live music, community events, and a seasonal ice skating rink during the colder months.

“As an urban renewal project that began more than 50 years ago, the reimagining of this property is integral to the transformation of Downtown White Plains, which began in earnest over 20 years ago with City Center,” said Louis Cappelli, CEO and founder of the Cappelli Organization. “The District Galleria will go a long way in making our local community more enjoyable, desirable, sustainable, and resilient.”

At this phase of the project, the development team does not have an anticipated construction schedule or a date of completion.

Leader Of Drug Delivery Service Responsible For Three Fentanyl Poisoning Deaths Sentenced To 30 Years In Prison

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that BILLY ORTEGA, a/k/a “Jason,” was sentenced to 30 years in prison for running a drug delivery service that distributed dangerous drugs for over seven years, including the fentanyl that killed three New Yorkers on a single day: Julia Ghahramani, Amanda Scher, and Ross Mtangi.  ORTEGA was convicted following a two-week trial in January 2023 before U.S. District Judge Ronnie Abrams, who imposed today’s sentence.

U.S. Attorney Damian Williams said: “Billy Ortega ran a drug delivery service that delivered fentanyl, killing three victims on a single day.  Worse yet, Ortega was fully aware that a customer had previously overdosed from the deadly fentanyl Ortega laced into his product yet continued sending the drugs to his victims.  Even after Ortega learned that his drugs killed three people, he told another drug dealer that they were too strong and to give them to other unsuspecting victims.  Ortega’s callous and remarkably evil conduct rightly deserved a significant sentence.  This sentence sends a message to the fentanyl traffickers causing the fentanyl epidemic in our communities that they will bear the most serious consequences.”

According to court documents and the evidence presented at the trial of ORTEGA:

BILLY ORTEGA was the leader of a major drug trafficking conspiracy, distributing dangerous drugs in New York City via a crew of workers from at least in or about 2015 to in or about February 2022.  ORTEGA used his mother’s apartment in Manhattan as his stash house, employing family members and close friends to manage his drugs and cash and to deliver his drugs to customers.  ORTEGA carried guns, supplied guns to his workers, and stored guns in the stash house to protect his drugs and drug money.  For years, ORTEGA ran his drug delivery service by text message, acting like a dispatcher, coordinating drug deliveries by messaging his couriers and his customers.

In March 2021, ORTEGA mixed fentanyl into a weak batch of cocaine and sold it to at least five customers, who had no idea that they were receiving cocaine mixed with that deadly opioid.  In the course of a single day – March 17, 2021 – ORTEGA delivered, through one of his couriers, fentanyl-laced cocaine to Ghahramani, Mtangi, and Scher at three separate locations in Manhattan.  All three victims died after consuming the drugs distributed by ORTEGA. 

On the day of the three poisonings – and prior to the fentanyl being delivered to any of the three victims – ORTEGA received a text message from a different customer warning ORTEGA that his drugs had almost killed someone else.  Specifically, that other customer sent ORTEGA the following text message: “Hey man. Just on a follow up from yesterday - I gave most of my last bag to my buddy and he just called me this second to say he ended up in hospital last night. [. . .] He had to get a Narcan shot and was released in the early hours.”[1]  ORTEGA read this text message prior to coordinating the three deliveries of the drugs, from the same fentanyl-tainted batch of cocaine, that killed the three victims in this case. 

Later that night on March 17, 2021, after the victims had stopped responding to ORTEGA’s text messages, ORTEGA offered the fentanyl-tainted batch of cocaine to another drug dealer, so he could test it out on “some girls” and see what happens.  Specifically, ORTEGA texted the drug dealer: “If you[’re] going to be around [the] way let me know have some every one is saying it’s to[o] Strong . . . Give it to some girls and you let me know lol bro.”  And when it became clear that ORTEGA had killed his customers, ORTEGA did not change course and stop selling dangerous drugs.  ORTEGA changed his cellphone number and continued selling drugs every day until he was arrested nearly a year later.

BILLY ORTEGA, 37, of West Milford, New Jersey, was convicted of conspiracy to distribute and possess with intent to distribute fentanyl, acetylfentanyl, and cocaine, the use of which caused the deaths of Julia Ghahramani, Amanda Scher, and Ross Mtangi; distribution of fentanyl, acetylfentanyl, and cocaine to Ghahramani, the use of which caused her death; distribution of fentanyl and cocaine to Scher, the use of which caused her death; distribution of fentanyl and cocaine to Mtangi, the use of which caused his death; and carrying, use, and possession of a firearm in connection with, and in furtherance of, the narcotics conspiracy.  In addition to his prison sentence, ORTEGA was sentenced to five years of supervised release. 

Mr. Williams praised the outstanding investigative work of the New York City Police Department (“NYPD”), the Organized Crime Drug Enforcement Task Force (“OCDETF”) New York Strike Force, the SDNY Digital Forensic Unit, and the New York/New Jersey High Intensity Drug Trafficking Area Intelligence Analysts for their support and assistance in this matter. 

The OCDETF New York Strike Force provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location.  This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.  The specific mission of the New York Strike Force is to target, disrupt, and dismantle drug trafficking and money laundering organizations, reduce the illegal drug supply in the United States, and bring criminals to justice.  The Strike Force is affiliated with the Drug Enforcement Administration’s (“DEA”) New York Division and includes agents and officers of the DEA; NYPD; New York State Police; Homeland Security Investigations; U.S. Internal Revenue Service, Criminal Investigation; U.S. Customs and Border Protection; New York National Guard; U.S. Coast Guard; New York State Department of Corrections and Community Supervision; Bergen County Prosecutor’s Office; Fort Lee Police Department; Palisades Interstate Parkway Police; Teaneck Police Department; Hillsdale Police Department; Closter Police Department; Northvale Police Department; River Vale Police Department; Englewood Police Department; Saddle River Police Department; Bergen County Sheriff’s Department; Hawthorne Police Department; and Hackensack Police Department. 

This case is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Micah F. Fergenson, Michael R. Herman, and Robert B. Sobelman, with the assistance of Paralegal Specialists Alex Frenchman and Christine Woods, are in charge of the prosecution.

[1] “Narcan” is an opioid antagonist used to counteract the deadly effects of drugs like fentanyl. 

Jury Convicts Long Island Fishing Captain of Conspiracy, Mail Fraud and Obstruction of Justice

 

A federal jury in Central Islip, New York, convicted a Long Island fisherman for crimes associated with his captainship of the trawler New Age from 2014 to 2017. The jury unanimously convicted Christopher Winkler of Montauk, New York, of one count of federal criminal conspiracy, two counts of mail fraud and two counts of obstruction of justice.

On at least 200 fishing trips, Winkler targeted summer flounder (fluke) and black sea bass and harvested those fish in excess of quotas and state trip limits. He also falsified Fishing Vessel Trip Reports (FVTRs) for those trips. His co-conspirators falsified corresponding dealer reports. Both sets of false documents were used to cover up fish that Winkler took in excess of quotas.

Photo of a man and the fishing vessel New Age, taken from surveillance footage. Image was presented as exhibit 9209 during trial in U.S. v. Christopher Winkler, case no. 2:21-cr-00217 in the Eastern District of New York.

“Fluke and black sea bass play a vital part in our marine ecosystem and quotas are designed to prevent overfishing and stabilize populations for the public good,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “We will continue to seek justice against those who flout laws that protect fisheries and the fishing industry.”

“While most U.S. fishermen follow the law, some still feel that they are above it,” said Michael Henry, Acting Assistant Director of NOAA's Office of Law Enforcement, Northeast Division. “It is our job to protect honest fishermen and good actors and this verdict should serve as a reminder that those who break the rules will be held accountable.”

Fishing quotas for fluke and black sea bass were designed by the National Oceanic and Atmospheric Administration (NOAA) and the New York Department of Environmental Conservation to ensure a long-term, sustainable population of the fish. As part of the fisheries management plan, NOAA requires fishing captains like Winkler to accurately complete an FVTR at the end of each fishing trip. Winkler was required to declare his catch – which included fish species and weights – to NOAA and the State of New York. To cover up his illicit harvest and landings, Winkler falsified approximately 200 FVTRs that he then mailed to NOAA.

Similarly, a fish dealer – which is the first company that buys fish directly from a fishing vessel –must specify what it purchases on a federal form known as a dealer report. NOAA uses this information to set policies designed to provide for biologically and economically viable fish stocks. Winkler sold illegal fish to three fish dealers. Because a mismatch between FVTRs and dealer reports would have alerted fisheries statisticians and enforcement personnel, Winkler’s co-conspirators falsified dealer reports to cover up that fish were taken in excess of quotas. The entire scam netted an overharvest of approximately 200,000 pounds of fluke and black sea bass, valued conservatively at least at $750,000 (wholesale).

In a related case, Bryan Gosman and Asa Gosman of Bob Gosman Co. Inc. – a Montauk-based fish dealer – previously pleaded guilty to a charge of criminally conspiring with Christopher Winkler in November 2021. They testified at the trial against Winkler. It was revealed during the trial that Bryan Gosman had served as a lookout for Winkler on at least 16 occasions during the conspiracy, often communicating by text before the defendant arrived at the dock.

Sentencing for all three defendants will be scheduled by the court.

NOAA’s Office of Law Enforcement investigated the case as part of Operation One-Way Chandelier.

New York City Hispanic Chamber of Commerce IT Seminar October 19, 2023

 

Rep. Alexandria Ocasio-Cortez - Sign Up: Virtual Town Hall on October 6

 

Sign Up: Virtual Town Hall on Friday, October 6

On Friday, October 6, 2023 at 5:30 pm ET, the Congresswoman will be holding her monthly town hall virtually. She will take questions from her constituents.

REGISTER HERE

We’ll also be streaming our town hall live on Facebook, YouTube, and X.

Spanish interpretation will be available. 

 

To send a question ahead of time, please email aoc.townhall@mail.house.gov or call 718-662-5970 with your name, neighborhood and question.