The major announcement signals a change in how the MTA will operate in the future.
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"We need ideas outside the box," he said. "Because frankly, the box is broken."
Cuomo's call for dramatic change comes on another day of commuter frustration and during the MTA's "Genius Transit Challenge Conference, which is bringing transit experts together to come up with ways of improving the city's rail service.
Watch his declaration announcement here:
Cuomo declares MTA state of emergency
The governor's plan is to expedite the agency's ability to reorganize and reallocated money.
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"I'm asking (MTA chairman) Joe Lhota to do a reorganization plan of the MTA in 30 days," he said. "Start with a blank piece of paper. There are no givens. There are no sacred cows. Design an organization that performs the function."
Cuomo turns to Lhota and interim executive director Ronnie Hakim, giving them 60 days to assess the capital needs.
"Our system, therefore, is again at a breaking point," Hakim said. "We are aggressively combating a New York transit crisis."
The city's subways and commuter trains have been plagued by rising delays and unreliable service. Dozens of people were injured when a subway derailed Tuesday.
"In an age where you are building drones and autonomous vehicles, it can't be 40 years to design and install a signal system for a subway system," Cuomo said.
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The new effort now is to speed up the procurement process for new equipment and cars to make repair work faster.
"New Yorkers deserve a safe, reliable and viable subway system," Lhota said. "That is our goal. That is our charge. That is what we must do."
The ongoing subway problems are coupled with repair work that will cause widespread delays at Penn Station, where the subways converge with New York and New Jersey commuter lines and Amtrak trains.
Cuomo repeated his warning that rail riders could face "a summer of hell" but said alternatives like ferries, express buses and creative train scheduling should provide some relief.