As part of my efforts to expand the dialogue on transit funding solutions and the measures for which advocates should push, I jumped into the fray Monday with a call for market-rate on-street parking spots. The proposal generated a lot of talk with most in favor to a tiered on-street parking system that somehow does not encourage more driving.
Today, I want to look at another approach — a very extreme approach at that — to the MTA’s funding problems: Is it possible to fund the system solely through farebox recovery? In other words, how high would the MTA’s fares have to go for the agency to cover its deficit by itself? The answer is rather terrifying.
During the fare hike debate and the discussion over the MTA’s fiscal future that unfolded for nearly four months this year, various numbers concerning farebox revenue were bandied about. The widely accepted formula centers around the idea that, counting passengers who opt out of mass transit, for each one percent the fare goes up, the MTA captures an additional $50 million in revenue. A ten percent increase nets $500 million, and that 23 percent increase with which we were threatened last November would have resulted in a $1.15 billion windfall for the MTA.
This is some easy math then. If the MTA were to attempt to cover their $1.8 billion revenue through farebox money alone, the agency would have to raise fares by 36 percent. The prices would contain a certain element of sticker shock. Those 30-Day Unlimited Ride MetroCards would cost $110. The base fare would have jumped from $2 to $2.75. Tolls and commuter rail fares would seem equally as steep.
Now, on the one hand, those fares sound expensive. On the other, by tying fare hikes into the cost of inflation, we’ll be there soon enough. Meanwhile, is a $110 30-day ride card that out of the realm of the ordinary? Based on the numbers from my two MetroCard Challenges, my average fare would wind up at around $1.50. That’s what it cost to ride the rails from November 12, 1995 until May 3, 2003.
As I’ve mentioned in the past, maybe one of the real financial problems is that New Yorkers are expecting a cheap and subsidized subway fare but put pressure on the MTA to make that a reality. Straphangers are barking up the wrong trees. The MTA can impact those financial indicators that are within its jurisdiction. That includes fares and services. Politicians though can ensure that the MTA is getting a subsidy that allows it to avoid this hypothetical 36 percent fare increase.
Last year, I proposed doubling the fares and a lengthy and contentious discussion ensued on this site. This proposal — a 36-percent increase and a budget relying nearly 75-90 percent on farebox recovery revenue — is equally as absurd. Maybe, though, it needs to happen before our politicians become wise to the ways of mass transit. Don’t worry, though; I won’t be on the steps of City Hall pulling for this one.