Archive for Fare Hikes
On Sunday, March 22, at 12:01 a.m., for the fifth time since 2008, the MTA is raising fares. On the one hand, the agency is attempting to overcome years of institutional deflation following the introduction of the unlimited ride cards that left today’s average fare lower in inflation-adjusted dollars than it was in 1996. On the other hand, New Yorkers are facing fare hike fatigue, and it’s unlikely to stop until Albany steps in as the MTA has budgeted for biennial hikes to align roughly with inflation for the foreseeable future. In advance, I’ve answered some frequently asked questions. Let’s dive in.
So what’s the new fare anyway?
It’s complicated. (It always is.) For the second hike in a row, the per-swipe cost is going up. One swipe will now deduct $2.75 from your MetroCard, and there’s an 11% bonus on all purchases above $5.50. The cost per ride for pay-per-ride cards then comes out to $2.48.
I’m not very good at math. What’s 11% of $2.75 and how do I find even amounts?
Have no fear; the MTA’s MetroCard Calculator is here. The key number to remember is $22.30. That’ll get you an even number of rides with the bonus and without any leftover amount. I’m sure we’ll see countless articles about this on various aggregator websites. It’s not that exciting.
How about the unlimiteds?
The 7-day card will cost $31, up a buck, and the 30-day card will jump to $116.50, up $4.50. For those who buy 7-day cards, the breakeven point is 13 rides per week, and for 30-day cards, the breakeven point is 48. If you ride 13 times or more in 7 days or 48 times or more in 30 days, you should be spending on unlimited cards and not pay-per-rides cards. Those totals are down considerably from where they were a few years ago.
Can I stockpile MetroCards?
While I remember stockpiling tokens as a kid with my parents in advance of each fare hike, the MTA no longer allows New Yorkers to hoard underpriced MetroCards. You can spend as much as you want now on pay-per-ride cards, and that money won’t expire. But if you buy a card on Saturday, you must activate it by March 29 to get full value, and you must begin using seven-day cards by April 4 and 30-day cards by April 27 to get any value.
Unused cards can be sent back to the MTA for a refund of the purchase price. Cards that you use in between that grace period gap will shut off at the end of the time period, and you can mail them back to the MTA for a pro-rated refund. For 7-day cards, that’s $4.29 per unused day, and for 30-day cards, that’s $3.73 per day. The refunds generally take around three weeks to process. (For example, if you activate a 30-day card on March 31, it will work until April 27. You can then mail it back for a refund of $7.46.)
I can’t believe there’s another fare hike. What can I do to stop it?
Complain to your legislators; write to Governor Cuomo. Ultimately, the politicians are in charge of transit policy and funding, and if they’re not going to step in, they deserve to hear all about it.
With that, let’s get to the good stuff. After the jump, weekend service charges for 13 subway lines. Read More→
The MetroCard, still at least five years away from retirement, will live through at least three more fare hikes, if the MTA sticks with its current schedule, and the first of the three is officially set for March 22nd. At its meeting on Thursday, the MTA Board voted to approve a modest fare hike that will bump fare revenue — and most fares — by approximately four percent, and although some New Yorkers grumbled about the higher transit costs, most advocates focused their post-hike comments on the MTA’s gaping capital budget hole.
The details didn’t come as much of a surprise as the MTA opted to raise the base fare for the second hike a row while maintaining a pay-per-ride discount. The unlimited ride cards went up only a small amount while tolls and commuter rail fares saw similar increases. Beginning March 22, a swipe will deduct $2.75 from a MetroCard while the pay-per-ride bonus will jump from 5% to 11% on purchases above $5.50. Effectively, then, the per-swipe cost will be $2.48, up just ten cents from $2.38. The optics are bad, but the fare hike is modest.
For those of us who use the bulk/unlimited-ride options, this year’s hikes are smaller than recent jumps. The 30-day card jumps from $112 to $116.50 while the 7-day option hops up a dollar from $30 to $31. The four percent hike for the 30-day card is significantly smaller than recent fare increases, but it’s hard to ignore how the cost for a 30-day ride has gone from $70 at the star to of 2005 to $116.50 ten years later. Even in a shorter time frame, the jump is significant as a 30-day card cost $89 as recently as December of 2010. The $1 surcharge on all new MetroCard purchases remains.
“The MTA has been able to limit these fare and toll increases to the equivalent of 2% a year thanks to our continued aggressive cost-cutting, while still adding service and improving service quality for our growing number of customers,” MTA Chairman and CEO Tom Prendergast said after the vote. “Our Financial Plan assumes modest biennial fare and toll increases, and the Board has chosen options with lower increases for our most frequent customers.”
In a way, New Yorkers have come to accept these fare hikes. Some people were grumbling about higher fares without a corresponding increase in service, and the MTA has seemingly settled into a pattern of offering service that’s good enough. Generally, the subway works well, and although it’s very crowded, with nine individuals days in December witnessing over 6 million riders, we’ll deal with crowds and delays. Improvements are just out of reach, and that remains a big concern.
As many MTA Board members pointed out during the meeting and as many transit advocates noted following the vote, if the $15.2 billion capital budget gap isn’t filled, we could be in for much steeper fare hikes in 2017 and 2019. “Today the MTA Board voted to raise fares on more than eight million subway, bus and commuter rail riders. But the real scandal may be yet to come. If Governor Cuomo and members of the legislature don’t decide on new revenue sources to fund the MTA’s five-year capital plan, larger fare increases are lurking around the corner,” John Raskin of the Riders Alliance said. “Paying for public transit with fare hikes is a regressive way to fund a public service that the entire region relies on. We urge Governor Cuomo and the legislature to act quickly to fund the next MTA Capital Plan, instead of passing on the cost to overburdened riders.”
Cuomo, of course, is too busy plotting an airtrain to address real funding concerns, and few people are paying attention to the way in which the fare structure seems to favor those with money who afford the $116.50 outlay. WNYC’s Matthew Schuerman analyzed the socioeconomic breakdown of the MTA’s fare structure, and it’s something I’ll revisit in a future post. Needless to say, although the MTA is on sounder economic footing today than they were five years ago, the agency is on the precipice of steep fare hikes that will make this year’s seem negligible if the capital gap is not closed. That would be bad news for New Yorkers.
After years of constant fare hikes, the straphanging public in New York seems immune to the looming increase set to descend upon the city in a few weeks. Instead of anger and protests, mass resignations rule the day, and the fare hike hearings last month were pro forma gatherings for the same old nothing. Still, the MTA has a decision to make, and according to reports, the agency may be leaning toward raising the base fare again while maintaining a pay-per-ride bonus.
The latest word comes from Rebecca Harshbarger of The Post. She reports that MTA Board members would prefer to maintain the incentive discount — a good idea if only for the psychology of it — while upping the base fare again by a quarter. In either fare hike scenario, the seven- and 30-day unlimited cards will increase to $31 and $116 respectively.
MTA officials are backing the hiking of the MetroCard’s base fare and increasing the bonuses on pay-per-ride cards in March– rather than keeping the fare the same and ditching the bonuses, the Post has learned. The MTA board will vote on fare and toll increase proposals next Thursday, but its members are overwhelmingly leaning towards raising the MetroCard from $2.50 to $2.75, sources said. To ease the pain, the hike will be accompanied with a 11 percent bonus if riders put $5.50 or more on their cards — an increase from the current 5 percent they would get.
The other proposal that had been under consideration was keeping the base fare the same, but eliminating the bonuses. Cards with bonuses are more popular among subway riders than single-ride tickets, which are used for less than 1 percent of trips and typically in stops with a lot of tourists…
“Only way we’ll know how the board votes is to attend next week’s board meeting,” said MTA spokesman Kevin Ortiz.
When I put the proposals to a vote in November, what is reportedly the MTA Board’s preferred option lost by around six percentage points. Still, I think this is the right way to go. It hurts to see the base fare increased for the second consecutive fare hike, but the pay-per-ride bonus is an important drive for transit ridership. It incentivizes bulk purchase which, in turn, incentivize more riders to use the system. Anyway, we’ll know for sure next week. Stay tuned.
After an election and weeks of waiting, the inevitable became reality as the MTA announced its fare hike proposals for the looming 2015 rate increase. Taking pains to stress the latest jump — the fourth hike in seven years — is a “limited” one, the agency noted that it amounts to only around two percent a year. On the one hand, that’s good news, but on the other, that means a fare hike in 2017. But we knew that already.
“The MTA is keeping its promise to ensure fare and toll increases are as low as possible, and these options are designed to minimize their impact on our customers,” MTA Chairman and CEO Thomas Prendergast said in a statement. “We have cut more than $1 billion from our ongoing expenses, but a modest fare and toll increase is necessary to balance our budget against the increased costs of providing the bus, subway, railroad and paratransit service that is the backbone of the region’s mobility and economic growth.”
It’s still up for debate whether the smaller hike was a good idea, and the details are as we heard last week. Take a look at the table below. The full proposals for the express buses, commuter railroads and bridges & tunnels can be found here.
|Proposal||Base Fare||Bonus||7-Day Card||30-Day Card|
|1||$2.75||11% with $5.50 purchase||$31||$116.50|
Yet again, the MTA is giving the public a choice, and the agency heads will hear from those members of the public who choose to voice their views during public hearings from Dec. 1-Dec. 11. Based on the pressure from rider advocacy groups who have identified the pay-per-ride discount as a key incentive for less well-off riders, already forces are lining up behind Proposal 1, but that would mean the second straight fare hike with an increase in the base fare. The MTA notes that under Proposal 1, the average swipe would be $2.48 while under Proposal 2, the average would be a straight $2.50. Even with the small difference, it’s hard to ignore the psychological affect of the discount.
For me, a regular user of the 30-day monthly, the fare hike is an inconvenience. I’ll have to pony up $54 per year more for my rides one way or another. I don’t have a strong preference, but do you? Let’s open it up with a poll.
The MTA has, for better or worse, made a biennial habit out of fare hikes. As part of a master plan hatched a bunch of years ago, the MTA committed to raising the fares every two years in an effort to maintain steady revenue streams. Although the current fare hikes outpace inflation, the MTA is also working to overcome a significant fare decrease from the late 1990s brought about by the introduction of pay-per-ride discounts and unlimited MetroCards. On average, we pay less per ride today than we did in 1996.
The riding public — the folks that don’t pay much attention to the ins and outs of transit policies, politics and economics — will be caught off guard by the 2015 fare hike. Due to pressure from Gov. Andrew Cuomo who was trying to avoid any whiff of bad news in the lead-up to last week’s Election Day, the MTA has remained tight-lipped about the fact the fare hike is happening or any details regarding the proposals. Now that the Governor has assured himself of another four years of whatever he’s doing, the unofficial MTA news embargo can finally be lifted, and we can talk about good news such as higher subway fares for all!
Now, gone are the days that politicians lived and died by the nickel fare, but the fare hike process lends itself to a special set of outrage. The MTA is legally obligated to go through a public hearing process, and it’s largely a charade. People will express outrage over higher fares while probably bringing up two sets of books over and over again while politicians bemoan the system they refuse to support. The MTA raises the fares anyway, usually based upon plans drawn up months before.
So as we gear up for the hearings, what does the future hold? Pete Donohue, tell the audience what they’ve won:
The MTA has drafted two possible fare-hike schemes for bus and subway riders — one that keeps the $2.50 base fare stable and another that raises it by a quarter. But both models would increase the monthly MetroCard by $4.50. The two scenarios were fashioned in advance of public hearings that the Metropolitan Transportation Authority will hold next month. The MTA board may not vote on a final package until January, but the increases would still go into effect as scheduled in March.
According to sources, the two fare-hike options are:
Option One: The base fare would remain at $2.50, but the 5% bonus would get trimmed. The 7-Day MetroCard goes up a buck, to $31, while the 30-Day MetroCard rises $4.50, to $116.50.
Option Two: The base fare is boosted by 25 cents, to $2.75, and the bonus increases from 5% to 11%. The 7-Day and 30-Day MetroCards are the same as in option one: $31 for the 7-Day card and $116.50 for the 30-Day pass.
Metro-North and the LIRR will be raising fares took, and Andrew Tangel of The Wall Street Journal reports that MTA Bridge & Tunnel tolls for trucks could increase by as much as 12 percent.
It’s hard to get too worked up one way or another over this proposal. The MTA had previously committed to a smaller-than-planned fare hike this year and stuck with it despite a huge capital funding gap and higher-than-anticipated labor expenditures. The fare hike is again whittling away at the pay-per-ride bonus, and to that end, I think a higher base fare with a more generous bonus is better. But higher base fares always affect those who can least afford it. Either way, I’ll be paying $116.50 (before tax, of course) for my 30-day card soon enough.
Which brings me to another point: As the federal government can’t do anything these days, pre-tax transit benefits are currently capped at $130 per month and seem to be stuck there. In the not-too-distant future, the MTA is going to hit that ceiling for 30-day cards, and then we’ll see what happens in Washington. For now, we’re facing another modest fare hike and one the city will have to resignedly accept.
Once upon a New York minute, just the threat of a subway fare hike was enough to sink candidates and raise voter ire. In fact, one of the reasons the MTA has had to dig out from decades of deferred maintenance — and one of the reasons why the MTA was created in the first place — was due to the five-cent fare. Until the system nearly broke down, politicians simply could not raise transit fares in New York City without seriously jeopardizing their reelection changes.
With the MTA firmly entrenched in Albany, now, one could be forgiven for hoping that the days of playing politics with MTA fare hikes are a relic of the past. One might also hope to hear from the distant rich relative or receive a lifetime supply of 30-day unlimited ride MetroCards. Politics and the MTA are alive and well.
Recently, I’ve spent some time examining Gov. Andrew Cuomo’s relationship with the MTA. When convenient for him, he uses the agency for positive press; when inconvenient, he runs away or actively works to hold off the bad news. The looming 2015 fare hikes are no exception.
As part of the MTA rescue plan a few years back, the agency committed to biennial fare hikes. Although these raises seem to outpace inflation, the MTA is still playing catch-up from the introduction of the unlimited ride MetroCard nearly twenty years ago, and the inflation-adjusted average fare is still less today than it was in 1996. The fare hikes are a sure way for the MTA to guarantee revenue and a way to level the fare with long-term inflation. We had a fare hike in 2013, and we know we’re having one in 2015. The increase in revenue may have dropped from a projected eight percent to around four percent, but the fare hike is coming one way or another.
In the past, the MTA has unveiled fare hike information in early October in order to prepare the public for hearings and brief the Board on the fiscal plan. This year, the MTA has engaged in near-radio silence regarding the fare hikes. In fact, during last week’s MTA Board meetings, agency head Tom Prendergast danced around the issue. He again confirmed the hikes were happening and promised information within a few weeks. Otherwise, though, he was tight-lipped on the numbers or proposals for revenue increases.
“For me to go any further than that is inappropriate because there haven’t been discussions. We have to follow the process and ultimately this has to follow a process where there’s an interchange with the public,” Prendergast said when pressed on the issue.
So why the delayed timeline and the lack of details or even a leak? I’ve been told by a few people in the know that Governor Cuomo has put the kibosh on fare hike talk until after Tuesday’s vote. He’s not in danger of losing to Rob Astorino, and the existence of the 2015 fare hike is public knowledge. But Cuomo doesn’t want the press to focus on numbers and increased costs at or around Election Day. He wants to run up the score on his opponents and then have this news come out. (This may as well be why the MTA Reinvention Commission hasn’t turned in a report yet, but I haven’t been able to confirm or refute that suspicion one way or another.)
And so we get another round of MTA politics. No one is discussing fare policy before Election Day. No one is discussing the capital plan, and no one is talking about ways to reform the MTA. It’s just the way Gov. Cuomo wants it.
In order to keep up with inflation and to compensate for the fact that subway and bus fares, in adjusted dollars, are lower today than they were 18 years ago, the MTA has put forward a plan for fare increases every other year for the foreseeable future. The original plan involved increases designed to raise revenue by 7.5 percent each time, but last November, the MTA lowered the 2015 and 2017 hikes to around four percent each. It was a risky move, relying heavily on the concept of net-zero labor spending increases, and one I thought the MTA made too hastily. Left unanswered, until now, is the big question: What happens if net-zeroes are unattainable?
In comments last week, MTA Chairman and CEO Tom Prendergast put forward a clear answer. Without net-zeroes, fare increases could balloon to 12 percent, far higher than originally anticipated and nearly three times as much as the hike promised last November. The Daily News had more:
Feeling pressure from its many unions, the MTA raised the possibility of a $2.75 subway ride and a $125 monthly unlimited MetroCard come 2015. Metropolitan Transportation Authority Chairman Tom Prendergast warned at a hearing in Albany Thursday that the authority’s labor problems could result in riders getting socked with a 12% fare hike next year — triple the percentage increase the authority already has in store.
Speaking at a joint legislative budget hearing — and delaying returning home following the death of his father to do so — Prendergast predicted “dire consequences” if a settlement to the MTA’s labor woes resulted in all of its workers getting raises along the lines of those that an independent mediator recently suggested be paid to Long Island Railroad employees…
The only other option Prendergast mentioned in that case would be for the MTA to slash $6.5 billion from its capital construction and maintenance program. That would translate into a loss of about one-quarter of the funding now planned for purchasing new buses and trains, replacing rails, fixing signals and overhauling stations. And even with those cuts, a fare hike of 5.25% would be needed in 2015. “This would be a terrible choice for our riders and our region,” he said of the alternative.
The 12 percent increase is a worst-case scenario, and there is an element of, as union officials noted, pitting riders against employees here. But the union has never been on the riders’ side; it’s always been on its own side, for better or worse. Furthermore, Prendergast has ever reason to put forward the most dramatic number possible in an effort to draw sympathy and negotiate through the press. After years without any contract and bitter back-and-forths between management and labor, what does he have to lose?
We shouldn’t be surprised either about the power struggle. The MTA has seen its economic forecast improve with the increase in tax revenues a healthier economy has produced, and surpluses always generate power struggles. Should the union get the money? Should the riders through the form of deferred fare hikes and better service? Ultimately, the MTA and the riding public will need the union to agree to work rule reform and other concessions if they want higher salaries, and somehow, riders shouldn’t be the ones bilked out of dollars by this fight.
Over the years, the MTA has not always used its best judgment when giving away money. In December of 2005, for instance, facing a variety of unfunded obligations — many of which still exist today — the agency reduced fares to $1 for the month as a way to give back. Some board members wanted to bank the surplus, but it passed anyway. A few weeks into the the discount program, the TWU went on strike, and eight years later, we’ve all but forgotten that brief fare blip.
Today, in 2013, the MTA has, in a sense, announced a different sort of giveaway. With various economic indicators on the rise and internal restructuring identifying perennial savings in excess of projections, the agency may not need to rely on fare hikes to cover large gaps, as originally projected. With the TWU’s contract situation outstanding, the agency’s current forecasts rely on a net-zero wage increase, but still, the MTA is confident enough to announce that out-year fare hikes will be lower than originally planned. Instead of increases every two years of 7.5 percent, the agency is looking to generate a pair of four percent hikes.
Many observers feel this is the right move. The 7.5 percent jumps were aggressive. Fares are still lowering in adjusted dollars today than they were before the onset of unlimited ride MetroCards in 1996, but the planned increases far outpaced inflation. It seemed too tough to ask passengers to continue to foot these bills every other year with no end in sight, and the IBO predicted $168 30-day cards by 2023. It was, some say, too much to ask of riders.
In today’s amNew York, the editorial board of the free daily makes that argument. Noting that fares went up, in some sense, by nearly 25 percent during an economic downturn, the paper politely applauds the MTA for showing some restraint:
While the MTA’s smaller projected fare hikes are plenty welcome now, they’re still not what we’d call a great leap forward. They’re just a smaller step backward. The plan — which the MTA board still must vote on — would slap riders with separate 4 percent increases in 2015 and 2017 instead of 7.5 percent increases. That’s roughly in line with inflation.
We’re pleased that the MTA — in its own tough-love way — does seem sensitive to recent sacrifices by riders. There are other ways it might have chosen to spend this windfall, which comes from internal belt-tightening and a pickup in real estate and ridership revenues. T
he agency — more than 68,000 employees strong — must hammer out a labor contract with the Transport Workers Union soon, and the TWU has had its eye on this money for awhile. There’s also the eternal imperative for upkeep — stations that need rebuilding, signal systems that need updating, track that needs replacing — an agenda made all the more urgent after the devastation of Sandy. So, while everyone has a hand out, the MTA wants to give its customers a break. It’s a smart move, and a good way to build a stronger base of customer support.
Allow me to play Devil’s advocate for a second, and question the smart move. Right now, the MTA can maybe promise a smaller fare hike, but what if everything collapses around it? If the TWU wins a big wage increase and if tax revenue drops, if the state raids its coffers, if another disaster strikes, that money is now gone. The MTA would have to swallow its pride and suffer at the hands of indignant riders and politicians if they roll back the decreased fare hikes, and it’s just impossible to predict the economics in a few years.
So instead the MTA has given up a few hundred million dollars of guaranteed money. Fare hikes remain the only way the agency can control its fate, and now, four years away, they’ve been reduced. I’m happy not to pay even more in 2015 and again in 2017, but if anything goes wrong, that’s a tough pill to swallow.
With an improving economy, record high ridership and internal cost-cutting buoying the MTA’s bottom line, the transit agency announced that planned fare hikes for 2015 and 2017 would be less than expected. In budget documents presented to the Board today, the MTA noted that the biennial fare and toll increases will be reduced to produce an increase in revenue of around four percent, down from initial estimates of a 7.5 percent jump. Still, the budget rests on shaky assumptions, and as other interested parties make a move to claim some of the pie, these numbers could still shift before the hikes are implemented.
According to agency documents, an aggressive effort to limit the growth of expenses to keep pace with inflation allows the MTA to realize savings that can be reinvested in the system. The MTA has already announced service increases on eight lines set for June, and even though constant price increases are tough to swallow, the fare hike reduction is good news for the straphanging public.
“We try to keep costs down in order to minimize the financial burden on our customers, and as this financial plan shows, we are succeeding in that effort,” MTA Chairman and CEO Thomas F. Prendergast said. “Our customers want value, which is quality and quantity of service, and that service has to be reliable and safe. Through this financial plan, that’s what we work to provide.”
In addition to these giveaways, the MTA has other plans for its financial flexibility. The MTA plans to invest approximately $80 million in the unfunded pension liabilities for the LIRR and make addition investments in other unfunded post-employment benefit obligations, thus realizing savings in the long-term as well.
Still, risks remain as the budget is tenuously balanced on the back of an assumption of net-zero wage increases, a point hotly contested by the TWU. The MTA will look to achieve this net-zero goal through a combination of a wage freeze, staff reductions, workrule efficiency gains and benefit reductions, but union officials have already tried to lay claim to some of these dollars. “They’re tossing a few crumbs at the public and expect to be patted on the back. It’s pretty outrageous,” TWU Local 100 President John said to The Post. “Both the workers and the riders deserve better.”
Samuelsen claimed the MTA should use all of the financial flexibility to give workers a raise and avert the fare hikes. His statements essentially ignore the fact that doing either of those — let alone both at once — would effectively deplete whatever cash surplus and financial wiggle room the MTA has. For now, though, the news is good, but as with all things MTA, the economics could change in a flash.
News that the MTA plans to raise fares every two years by an amount that exceeds the rate of inflation set off some alarm bells amongst the city’s transit advocates this week, and today, the Straphangers Campaign released some back-of-the-envelope calculations that show transit fares could rise to $3.75 a ride by 2023. It’s a sobering picture — perhaps one that relies a bit too much on sticker shock — but it should serve as a wake-up call to Albany.
“Constant fare hikes will overburden riders, discourage use of mass transit, and cannot be sustained over time,” Gene Russianoff, head of Straphangers Campaign, said in a statement. “Without more financial support from Albany, the MTA might as well start making announcements that “there is a fare hike right behind this one.’”
At the behest of the Straphangers, New York’s Independent Budget Office analyzed the fare history since the introduction of the Metrocard in 1996 and the MTA’s fare hike plans for the next ten. Noting that fares generally have to increase by around 8.4 percent to generate a 7.5 percent bump in revenue for the MTA, the IBO anticipates the possibility of a $168 30-day transit pass and a $3.75 per-swipe cost by 2023. Fares, they say, would increase a rate that exceeds inflation, and in constant 2013 dollars, the fares in 10 years would be approximately 15 percent higher than they are now.
In its defense, the MTA notes that the average fare is still lower today in inflation-adjusted dollars than it was in 1996 when Metrocards came onto the scene, but I am again left wondering if these constant increases that outpace inflation are sustainable. As I said yesterday, at some point, New Yorkers will stop begrudgingly accepted fare hikes and will start loudly protesting. What’s the breaking point though? A $3 fare? A $150 30-day card? Or are these figures and expectations simply the ever-increasing costs of life in New York City?