Home Fare Hikes MTA debate moving from fare hikes to fiscal focus

MTA debate moving from fare hikes to fiscal focus

by Benjamin Kabak

During the CNN/YouTube Republican debates on Wednesday night, one YouTube user in Florida asked the candidates about their plans to invest in the nation’s aging infrastructure. Our illustrious former mayor drew the short straw, and in his answer, he claimed that he made sure the city invested heavily in its infrastructure. He claimed that he made sure the city’s vital parts were adequately funded and in good repair.

Mr. Giuliani, our subway systems beg to differ.

I was watching this debate with some friends of mine and sitting next to me were the documents I used yesterday in my post on the Capital future of the MTA. Those documents happen to have charts detailing the levels of state and city investment in the MTA, and these numbers — and our past reality — simply contradict Giuliani’s claims. During his terms as mayor of the City of New York, he took money away from the MTA that should have been going to fund our Transportation Authority. That’s not have I would define an investment in infrastructure.

But now, it seems like the fiscal tide is turning. As MTA CEO and Executive Director Lee Sander pushes his message and opens up the MTA’s books, more and more influential subway advocates and politicians are starting to support the idea that the state and city owe more money to the Transportation Authority.

We start with a piece in The Daily News by the Straphangers’ attorney Gene Russianoff and and Democratic State Senator Eric Schneiderman. The two give a more detailed economic breakdown of the way New York State and New York City withdrew their MTA funding obligations during the Pataki/Giuliani years. As these two subway experts paint a picture of impending financial ruin, they close with an optimistic statement on the future:

Fortunately, there now seems to be a new level of energy behind the idea of going beyond a short term fix to address these deeper problems. Members of the state Senate and Assembly are urging the MTA to seek state aid rather than raise fares. Newspaper editorial boards have been a strong part of the push as well. And Spitzer and the MTA have found $220 million in new funds to freeze the base bus and subway fare at $2.

That is a first step. Spitzer has a lot on his plate, but ending Albany’s systemic abuse of our 7.5 million straphangers should be at or near the top of the pile. He must work with the Legislature and the MTA board, both to avoid a fare hike in 2008 and to set a new agenda for our state’s mass transit program – an agenda that breaks with the unsustainable and inexcusable policies of the last 12 years.

Except for one philosophical point concerning the fare hike, I completely agree with Russianoff and Schneiderman. The MTA needs the money. But how much do they need?

Well, Crain’s New York Business Journal reports today that the MTA will ask for $23 to $28 billion for the next five-year Capital program. While this is a higher figure than the MTA originally reported earlier this year, it is in line with what officials were discussing at the Public Engagement Workshop. The budget projections have increased due to a slowing down of the U.S. economy and rising construction costs.

This request however is secondary and bound to earn state approval. The real substance of what the MTA needs comes in the additional $600 million annually that MTA officials say the state should give them. This is the money they need to avoid a fare hike and keep up operations and debt service payments.

Yet, Sander is not optimistic. He too has noted that the state, strapped for cash, may have a tough time coming up with more money. “Our concern, quite frankly, is that there is a limit in terms of Albany being able to respond,” Sander said. “Could you just give us your thoughts about how Albany can find the money?”

While Schneiderman claims that the state legislature is willing to close numerous tax loopholes, I bet the Republicans in the Senate won’t be too thrilled to follow through on that promise. So it all comes back to the fare hike.

Unlike Schneiderman and Russianoff, I don’t think the MTA is in a position to wait on the state to deliver the goods because Governor Spitzer and the individual Senators are just not in a position to make those promises on their own. People are starting to notice that the new fare plan put forward by Spitzer and Sander last week will still be a substantial fare hike, and that’s because the MTA needs those funds.

We can’t afford to watch our subways fall into a state of disrepair, and unless the legislature wants to hold an emergency funding session for the MTA, six or eight months is a substantial amount of time for the MTA to fall further into debt. I would be happy to see the fare hike dropped but not until a firm financial plan that puts the MTA back on the road to fiscal security is in place. Right now, I just don’t see that happening.

Photo of the old tokens and a Metrocard by flickr user MacRonin47.

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Gary November 29, 2007 - 1:35 pm

Ben, I wrote a briefer post about this article before I saw you had written about it.

What we should be doing is pressuring elected officials to fund the MTA, not just accept a fare hike as an inevitability.

As I posted on an earlier thread, fare increases in NYC are outpacing inflation . . . and Russianoff and Schneiderman have it exactly right. The MTA’s funding problem is the direct result of a culture of governing (GOP) that despises government and prizes tax cuts and privatization above all else.

NYC’s transit system is a major engine of this state’s growth and success, and the state and city need to step up and fund it properly.

As for Giuliani, if he told me it was raining I’d leave my umbrella at home. I’m only surprised he didn’t funnel off transit funds to pay for his Hamptons trysts.

Cheers, Gary

Gary November 29, 2007 - 1:43 pm

Oh, and here’s a link to the history of transit fare increases:

Marc Shepherd November 29, 2007 - 2:56 pm

When you compare fare hikes to the rate of inflation, you need to consider the nearly half-century that the fare was stuck at five cents. To this day, many of the system’s problems are rooted in the a decades-long refusal to price the service realistically.

Furthermore, during the Pataki administration, much of the capital work was funded with debt service, which of course puts off the problem to another day. This is a typical political strategy, because those incurring the debts are almost never the ones stuck with paying them off. So Pataki gets to look like a hero (increasing transit investments without raising taxes), and Spitzer inherits a mess.

The problem is that, even with the most wildly optimistic assumptions of increased government subsidies, there won’t be enough money to run the subway, payoff the debt, and pay for capital improvements, without raising more farebox revenue.

Second Ave. Sagas | Blogging the NYC Subways » Blog Archive » Tightening budgets, MTA proposes permanent bus service changes November 30, 2007 - 5:34 pm

[…] part of its effort to shore up their fiscal future, the MTA has released documents that show how some service changes may become permanent. This is […]


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