Jul
25

Details emerging about upcoming fare hike

By · Published in 2007

Update: As expected, the MTA’s announcement jibes with the details we already knew. Of note is that the MTA is committed to provide more service to complement these fare hikes. The public will be much more accepting of this hike if more servide becomes a reality. More later.

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As the Day of the Fare Hike progress, details are emerging about the direction in which the MTA will head today. While not great for commuters, it sounds like this won’t be the most drastic fare hike in recent times.

Notably, as William Neumann of The Times notes, the MTA is looking to raise toll and fare revenues by 6.5 percent. The overall inclusion of tolls and fares is an important point to highlight. It’s up to the MTA to determine how they will draw in this revenue. They could opt for a large toll increase and a smaller subway and bus fare increase.

Neumann writes:

The plan..does not specify how much the base subway fare, unlimited ride MetroCards or bridge and tunnel tolls would go up, but it calls for an overall increase in fare and toll revenues of 6.5 percent…Based on annual fare and toll revenues of approximately $5 billion, a 6.5 percent fare and toll increase would generate about $325 million a year in additional income for the authority.

At a time when the MTA’s future revenues are largely relying on volatile property tax rates, the agency is also looking to implement an inflation-based measure that would feature modest fare hikes every two years. I think this is a great idea.

For decades, the New York City subways fell into disrepair because the independent companies that owned the various lines were afraid to hike the rates up from a nickel. For over forty years – from 1904 until 1948 – the fare was a nickel, and it doesn’t take an economic genius to know that a nickel in 1904 went a lot farther than a nickel in 1948. Sticking with inflation would ensure a steady stream of money from the MTA.

As the MTA board gears up to discuss these fare hike plans, they seem to be against cutting service and maintenance. Here lies one of the reasons why the public may feel up for stomaching this fare hike. People understand that the subway system can’t afford more deferred maintenance or delayed service.

And finally, with talk of the congestion fee swirling, the MTA has quickly noted that they wouldn’t see a penny of congestion fee money until 2010 at the earlies. As many have noted, the Authority cannot count on money they may or may not receive until the end of the decade as they contemplate their budgets for the next year. So here comes a fare hike.



Categories : Fare Hikes

15 Responses to “Details emerging about upcoming fare hike”

  1. Harlan says:

    (Typo: you mean “every two years,” not “every two hikes,” right?)

    Yes, this sounds like a good idea. Also, the money from the Feds that they’re hoping to get as part of the congestion pricing would go to capital expenses and improvements, not operating expenses, right? So that money couldn’t be used to stave off a fare hike?

  2. Marc Shepherd says:

    You’re right about the disastrous effects of the five-cent fare, but I think you’ve got the history wrong. It’s not that the independent operators were afraid to raise the fare, but that politicians prevented it. Indeed, after unification, the five-cent fare would endure for another eight years.

  3. I glossed over some of the details concerning the five-cent fare. For much of the early party of the 20th Century, the independent operators – BMT, IRT – were reluctant to raise the fares for fear of competition and a public backlash. After unification, the citizens of the city felt that they were “entitled” to a five-cent fare, and politicians knew it would be the death of their careers to raise the fares. The MTA suffered for decades before bottoming out in the late 1970s and early 1980s, at which point the MTA undertook a fairly aggressive approach to raising fares.

    And Harlan, it’s unclear right now exactly how the congestion fee money would be doled out. I think it goes into the MTA’s coffers and they decide. The idea is that it would go toward providing more service to those people who aren’t driving. Whether that means new lines – Second Ave., etc. – or more frequent service on lines that aren’t at capacity is up for debate.

  4. Marc Shepherd says:

    The only subway service improvements mentioned are:

    — Additional rush hour, weekday off-peak and weekend service on the L Line.
    — Additional evening service on the Nos. 1, 4, 5 and 6, and additional weekend service on the No. 7.

    That’s better than nothing, but less than some of us had hoped for (e.g., no V extension into Brooklyn).

  5. peter says:

    SEEN THIS?

    FROM THE NYTIMES Website:

    July 25, 2007, 1:58 pm
    To Avert a Fare Hike, Let Disney Pay the Freight
    By William Neuman

    Could Mickey Mouse rescue straphangers from a fare hike?
    The Metropolitan Transportation Authority’s board met today to discuss a proposed increase in fares and tolls and amid a blizzard of numbers came at least one innovative suggestion. Why not raise money, asked board member Norman Seabrook, by selling Disney the right to blanket the Times Square subway station with advertising?
    It was not enough to merely talk about a fare increase, Mr. Seabrook said, and he continued:

    What I am asking is at the same time we take the opportunity to look at different areas of raising funds to help support, if there is going to be an increase, to lessen the burden on the public. Example: I would rather try to sell 42nd Street’s subway system underground to Disney for $60 million a year and have them paint it any way that they want to paint it. They spend $100 million for one minute to be on the Super Bowl on a Sunday. I think that they would spend X amount of dollars in rent for that terminal. I think 34th Street would do it. I think other businesses around the state and the city would do it. That would lessen the burden on the public.
    Mickey Mouse and Donald Duck aside, the authority might have an easier time making a sales pitch to Disney than it will selling a fare hike to the public and to the state and city politicians they need to support their plan.
    The authority’s executive director, Elliot G. Sander, who released a preliminary financial plan today, said that it was too early to say exactly how much subway and bus fares, commuter rail tickets and bridge and tunnel tolls would rise. He said the authority wants to increase its revenues from those sources by 6.5 percent. Hearings will be held this fall and the board will then decide whether to go ahead with the fare hike, which could go into effect early next year.
    It is not yet clear, Mr. Sander said, how an overall 6.5 percent increase would be distributed among the different types of fares, such as the base $2 fare for buses and subway, or seven-day and 30-day unlimited-ride MetroCards.
    Mr. Sander said the fare hike is needed because the authority’s debt payments are about to go sky high, prompting forecasts of dire financial times in coming years. That may be a hard sell because the authority continues to enjoy hefty budget surpluses, largely generated by windfall income from real estate and mortgage taxes that are dedicated to mass transit.
    In calling for a fare and toll hike, Mr. Sander is taking a long-term approach, warning that unless fiscal care is taken today, disaster may loom in the form of service cuts and a whopping 15 percent fare hike a year from now.
    To sweeten the pill, however, he offered some enticements for riders. He said that the authority may hire about 200 additional cleaners to spruce up subway cars and stations.
    Transportation, Disney, M.T.A.
    Related
    Questions for Spitzer; a Proposed Fare Hike; Details in Connecticut Slayings; and MoreBuilding a Better Playground (as Easy as M-I-C, K-E-Y)No. 1 on the Subway Map, and No. 1 in the RankingsThe Smart Money in Midtown, and a Changing Landscape 2 comments so far…
    1.July 25th,
    2007
    2:22 pm A fare hike is unconscionable, period. Trains are full, tons of money flows in, they don’t have enough? Who can believe that? But if Disney, or any business, wants to help, yes, by all means.

    — Posted by Matt Cutugno
    2.July 25th,
    2007
    2:36 pm Apart from more ads in the subways, why in the holy heck aren’t there ads on the Metrocards themselves? That’s a huge revenue source that’s just sitting there!

    — Posted by Bob

  6. Peter, I just saw that. Thanks for the tip. I’m going to write up some thoughts on that later. It is an intriguing idea to say the least.

  7. danberkman says:

    I think you are missing a crucial part of the history of the subway fare puzzle. The fare hikes that started when it became clear the the five cent fare was simply not sufficient could have been slowed and prevented by using the surplus monies that the Triborough Bridge and Tunnel Authority had at the time. But Robert Moses, head of that Authority knew that to give the money to the city was to reduce his power and the nearly unlimited power of his public authority and so he sabotaged all such efforts to help the city pay for its ailing transit infrastructure with the hundreds of millions of dollars that he was reaping from his toll bridges and tunnels. The city, always broke, could have used those revenues to modernize the subway and bus systems fifty years ago but instead we all know what happened.

    Also, the fare question is tricky on because, especially for a precarious transit system, a rise in fares always means a decrease in ridership which leads to the death spiral of increasing fares and lower ridership.

  8. We could write books on the five-cent fare and its effects on 20th Century New York. But now we have a complete picture.

    I would like to respond to this point: “Also, the fare question is tricky on because, especially for a precarious transit system, a rise in fares always means a decrease in ridership which leads to the death spiral of increasing fares and lower ridership.”

    I don’t think that’s true. Look at what happened when the fares went up from $1.50 to $2.00. We’ve seen an historic increase in subway riders. Ridership is at a 54-year high. I don’t think a modest 6.5 percent increase would kill ridership.

  9. adamess says:

    I thought that the 5 cent fare was specified in the dual contracts, preventing the IRT and BMT from raising it without a renegotiation…

  10. Victoria Jeter says:

    I feel like we JUST had a fare hike…

  11. This is one of the best posts I’ve ever seen on this subject. It should be required for all interested parties to read. Why you ask? So they understand the facts about the five-cent fare. That being said, I believe we all understand that this is not a surprise about the hike among fare.

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Trackbacks/Pingbacks

  1. […] weeks after the MTA announced a 2008 fare hike, the New York City Comptroller has issued a report concluding that the MTA could avoid a fare hike […]

  2. […] heard a litany of calls from politicians urging the MTA to hold off, or outright reject, the upcoming fare hike. The folks who hold the purse strings – the New York State Comptroller and the New York City […]

  3. […] knows, the fare hike debate has been raging for much of the last two months. The MTA wanted a higher increase and a base-fare hike as well, but Gov. Sitzer, ever mindful of those tourists in New York, decided he would rather screw […]

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