MTA: Cost of tariffs, federal funding cuts could exceed $1B

Trump administration tariffs and cuts in federal transit funding could cost the MTA more than $1 billion, MTA officials said Wednesday, warning that this could jeopardize the Long Island Rail Road’s plans to finally replace its 1980s-era train cars.

To avoid the setback in efforts to modernize its fleet, the MTA is imploring the federal government for an exemption on tariffs for suppliers of parts for its trains and buses, which are largely manufactured in the United States.

Jessie Lazarus, chief of rolling stock for the MTA, said President Donald Trump's tariff program "presents an unprecedented challenge" for the transit authority.

"If it is not contained, it will force us to make difficult decisions about upcoming investments," Lazarus said at the MTA’s monthly board meeting at its lower Manhattan headquarters Wednesday.

Lazarus noted that while the MTA abides by Federal Transit Administration rules requiring that 70% of buses and trains be manufactured in the United States in order to be eligible for federal funding, "some of the components ... are so specialized that we cannot avoid importing them." They include carbon steel train wheel parts from Japan and fan motors from Italy.

With up to 30% of bus and train parts being imported, Lazarus said the Trump tariffs could cost the MTA an additional $1 billion through 2030 — putting in question future purchases, including of 150 new M9A train cars for the LIRR that would replace the 40-year-old M3 cars still in service.

"As this board knows, ridership on the railroad is soaring. And these additional cars will ensure that everybody has space on trains for years to come," Lazarus said. "Nobody likes to stand from Ronkonkoma to Penn."

Contractors looking to manufacture buses and trains are adding a "premium" to their bids to protect against the impact of tariffs, according to MTA officials, who said they will seek an exemption from the import taxes.

Representatives from the U.S. Department of Transportation did not immediately respond to a request for comment.

In a statement, Gov. Kathy Hochul said Trump’s "reckless trade war" is threatening the largest investment in upgrading the MTA’s fleet of buses and trains in its history.

"Our entire region depends on the MTA to get around, and this planned investment promises to support thousands of good New York jobs," Hochul said.

MTA Chairman Janno Lieber said Trump administration policies are impacting the transit authority’s finances in other ways, too.

Proposed cuts to formula-based federal transit funding could cost the MTA an additional $250 million a year. Reductions in other programs, like the All Stations Accessibility Program, which provides grant funding to upgrade disability accessibility at older transit stations, could further harm the MTA’s finances.

Some of those cuts came with the expiration Wednesday of a five-year surface transportation funding program passed by the Biden administration.

 " This is unacceptable, considering that the MTA is already wildly underfunded in the first place," said Lieber, noting that the MTA receives about 17% of federal transit funding, despite carrying about 65% of the nation's transit riders.

Lisa Daglian, executive director of the MTA Permanent Citizens Advisory Committee, which includes the LIRR Commuter Council, said in a statement that the federal cuts would "directly affect transit riders," as they would mean less funding for projects like station upgrades.

"Funding to pay for these projects has to come from somewhere, but it cannot come from riders," Daglian said.

By Alfonso A. Castillo

alfonso.castillo@newsday.com@alfonsoreports

Alfonso Castillo has been reporting for Newsday since 1999 and covering the transportation beat since 2008. He grew up in the Bronx and Queens and now lives in Valley Stream with his wife and two sons.