Archive for Fare Hikes

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
2 $2.50 None $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.

Which fare hike proposal would you prefer?
View Results
Categories : Fare Hikes
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The fares to fill up a MetroCard, such as this one celebrating the MTA's new $1.4 billion Fulton St. Transit Center, will soon increase. (Photo by Benjamin Kabak)

The fares to fill up a MetroCard, such as this one celebrating the MTA’s new $1.4 billion Fulton St. Transit Center, will soon increase. (Photo by Benjamin Kabak)

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.

Categories : Fare Hikes
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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.

Categories : Fare Hikes, MTA Politics
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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.

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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.

Categories : Fare Hikes
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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.

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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?

Categories : Asides, Fare Hikes
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The MTA budget documents released yesterday show how aggressive cost cutting and fare hikes could eliminate nearly all potential deficits through 2017. [pdf]

The MTA will rely more and more on fare hikes to close its budget gaps in the coming years. [pdf]

It wasn’t a big surprise when the MTA last week revealed a budget that relies on biennial fare hikes for the foreseeable future. Richard Ravitch put forth a plan in 2009 to rescue the MTA’s budget that would have spread the fiscal pain around equitably, and in it, he called for fare hikes every two years that aligned with inflation. The MTA is simply following through on their end of the bargain, but how long will the public be accepting of such hikes?

By the time mid-2017 rolls around, when the 7 line extension reaches the Far West Side and Phase 1 of the Second Ave. Subway is in revenue service, New Yorkers will have lived through two more fare hikes. The MTA anticipates that each hike will be around 7.5 percent and will generate, by 2017, nearly $1 billion in added revenue. The MTA needs this money because rising paratransit costs and health and pension obligations along with a never-ending stream of debt service payments will continue to tax their budget. When the new subway lines are ready for passengers, operating costs will go up as well. It’s an expensive, vicious cycle.

I’ve been wondering for the last few days how long New Yorkers will stomach these fare hikes. Already, subway riders complain about everything, and many of their complaints are with merit. Sometimes, we’re paying more for less, and usually, we’re paying more for the same. As complaints continue and fares go up, ridership increases as well. May, for instance, witnessed one of the most popular month’s in New York City subway history. At some point, though, the grumbling will grow louder, and New Yorkers may be able to make enough noise to get politicians to do something about the constant increases. That day hasn’t yet come.

I’m not the only one who’s noticed the ever-rising fares. In their Sunday editorial, the Daily News cast a wary eye on the MTA’s fiscal future. The planned fare hikes, they noted, far exceed the measure set forth in the Ravitch plan, and it’s time for something — whatever that may be — to be done.

Since 2008, the cost of a 30-day MetroCard has risen from $81 to $112. This represented a 38% leap at a time when inflation ran at 8%. Had fares tracked inflation, the 30-day card would cost $88…[Under the Ravitch plan], assuming the state fulfilled its obligation to provide adequate funding, riders would suffer hikes every two years. But how much would those increases be?

Here’s exactly what the Ravitch report stated: “The Commission’s view is that the MTA Board, as part of its normal, public budget making process should be empowered to increase fares and tolls no greater than the change in the Regional Consumer Price Index and no more frequently than bi-annually.”

…Since then, the MTA has kept to the every-other-year schedule and plans to do so again in 2015 and 2017. But each time it has factored in hikes of 3.75% a year, almost double the inflation rate. Asked why and how the MTA set the raises at 3.75% annually, or 7.5% for two years, the agency’s spokesman replied, in effect, that no one had any idea. MTA Chairman Tom Predergast must change the basic assumption as to how much the riders will be asked to pay. He needs to abide by the bargain struck with the MTA’s financial rescue five years ago. The riders will do their part by ponying up for inflation — and no more.

On the one hand, the News raises a very good point about the Faustian bargain Ravitch had proposed. The fare hikes were supposed to be tied to the rate of the inflation, and that would have been a rather livable solution for many New Yorkers. But on the other hand, the editorial relies on a few assumptions — one that didn’t come true and one that’s highly problematic. The first is that the state did not fulfill its obligations. It torpedoed a congestion pricing plan that would have helped alleviate the fare hikes, and the state hasn’t developed a new significant source of regular and reliable transit funding.

More fundamentally, though, concerns the question of who should pay and for what. The MTA can raise revenue without state action only through fare hikes, and there is a very valid argument to be made that riders should be expected to pay for the service they need and want. Thus, if the MTA’s costs and budget demand more revenue, higher fares — to the tune of a 7.5 percent fare hike every other year — are the way to go. The problem here concerns costs. The fare hikes aren’t paying for more service for riders; rather, the money from the hikes is going to uncontrollable pension costs for former employees no longer working. Whether that’s fair for everyone is a question I’m in no position to answer right now.

So the fares will go up, and they will go up far more than we’d like. Until New Yorkers get so fed up with cost increases that they appeal to their representatives to do something, we’ll be left with 7.5 percent fare hikes every other year. The subways and buses aren’t getting cheaper, and the people who ride will be the ones footing more and more of the bill, for better or for worse.

Categories : Fare Hikes
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The MTA budget documents released yesterday show how aggressive cost cutting and fare hikes could eliminate nearly all potential deficits through 2017. [pdf]

The MTA budget documents released yesterday show how aggressive cost cutting and fare hikes could eliminate nearly all potential deficits through 2017. [pdf]

The MTA unveiled a revised draf of its four-year financial plan on Wednesday, and while budgets are not particularly sexy, fare hikes are. This plan is chock full of fare hikes as the MTA’s fragile financial outlook relies on fare hikes every two years for the duration of the plan. Just how long, I have to wonder, will New York’s transit riders begrudgingly accept these fare hikes before it becomes a major political issue?

In plans released yesterday, the MTA still projects some deficits through 2017, but as February’s numbers showed alarming negative balance sheets, the July numbers are significant better. By 2017, the MTA expects to face a deficit of just $100 million — down from over $300 million — but these projections are based on a series of assumptions that may not come true. Riders are going to shoulder a significant amount of costs as fares continue to increase, and anything that rocks the MTA’s financial boat could be disastrous for the agency.

For the public, the fare hikes are the bad news, and they rightly dominate the media coverage. After fits and starts of raising the fares only when the budget looked dire, the MTA has instituted a policy of biennial fare hikes ideally tied to inflation. After a fare increase in 2011, the MTA jumped their prices by around 7.5 percent this year and plan to do the same in 2015 and 2017. Both hikes will be for around 7.5 percent as well, and without these fare increases, the MTA’s financial outlook is a negative one indeed.

If all goes according to plan, then, the MTA’s looming price increases will generate significant revenue for an agency looking at out-year projections that are very, very red. In 2015, the next fare bump will bring in over $400 million, and when the cost of a subway ride jumps up again in 2017, the total generated from the next two fare hikes will be a hair under $1 billion annually. Without the fare increases, the MTA’s deficit would be insurmountable. As such, the city’s riders — all 5.6 million of us daily — are the only thing keeping the subway system afloat.

Outside of these fare hikes, though, nearly all of the other assumptions are not sure things. The only sure thing is a concerted effort to cut internal costs. The MTA anticipates that, by 2017, it will have eliminated $1.3 billion in annual recurring costs, thus achieving internal cost-cutting projections first put forward in 2009. That’s a laudable goal for an agency that has long operated with much bloat, but more could be cut if operations were further streamlined.

Beyond these measures, though, the MTA is expecting a net-zero increase in labor costs over the next four years. While the MTA has realized such savings over the past few years, the TWU’s contract situation remains unresolved, and a net-zero reality saves just $300 million annually by 2017. Meanwhile, pension and healthcare costs are expected to jump by nearly 10 percent over the next four years and are among the biggest uncontrollable costs currently on the MTA’s books.

Beyond fares and labor savings, the MTA is relying on dollars largely outside of their control. Operating costs will increase as the 7 line extension and then Phase 1 of the Second Ave. Subway open, and the agency’s insurance rates took a huge hit after Sandy. Agency officials said yesterday that the MTA is getting half its previous coverage for twice the cost. Meanwhile, revenue from dedicated and federal contributions remain subject to the push and pull of the New York and U.S. economies.

Finally, the so-called “longer term vulnerabilities” come into play. The MTA will launch a new capital program in 2015, and it will likely be funded through bond issues and more debt. Pension, healthcare and paratransit costs are spiking upwards as New Yorkers live longer with less mobility, and weather mitigation and protection efforts will put a strain on the budget. It’s a never-ending scenario of investments.

So what does this all mean, you may ask. After all, budget forces and pure numbers are the ultimate in transit wonkery. The final picture, though, is a simple one: New York’s transit riders are going to be asked to shoulder an ever-increasing portion of the costs. Absent direct state investment, the best way for the MTA to raise money and increase its revenue is through fare hikes, and ridership, which recently reached an all-time high, has shown no signs of abating. People need the subways, and the MTA needs money. So we’ll get fare hikes in 2015 and 2017 and likely in 2019 and 2021 too. Until New Yorkers start agitating louder for an end to fare hikes, they are, for better or worse, the only route to budget stability.

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Long gone are the days and costs of the blue MetroCard. (Photo via Second Ave. Sagas on Instagram)

The cost of life in New York City will continue its inexorable march upward this weekend as the MTA raises transit fares and tolls this weekend. It’s the third time in the last four years that fares have gone up, and New Yorkers grumble about it each time. We’re paying more for the same service, and riding the subways has always been a bit of a grind. This won’t be the last fare hikes — the MTA has an increase on the books for 2015 — but this one introduces a few new concepts and bonus structures. Let’s dive in.

When do these new fares kick in?

That’s an easy one: The new fares for New York City Transit buses and subways commences at 12:01 a.m. on Sunday, March 3. Revelers stumbling home late after a Saturday night out will be the first ones greeted with higher transit costs. Nine-to-fivers will suffer their own sticker shock when the Monday morning commute kicks in.

What are the new fares?

For the first time since 2009, the MTA is jacking up the base fare. A cost of a swipe for pay-per-ride users will now check in at $2.50. Those who purchase $5 or more on pay-per-ride cards will enjoy a small bonus of 5 percent, but all new cards — pay-per-ride and unlimited — purchased via MetroCard Vending Machines will carry a $1 surcharge.

The price on unlimited cards is going up a bit as well. The 30-day cards will cost $112, and the 7-day cards will now cost $30. A 7-day express bus card will set a rider back $55. These unlimited increases are smaller, percentage-wise, than they had been in the past, and that’s a win for daily straphangers who have been shouldering more of the burden during prior fare hikes.

What should I be stockpiling?

While hoarding tokens prior to a fare hike used to one of my parents’ pastimes, the MTA has largely limited that practice due to sunset dates and shorter grace periods. Cards purchased prior to the fare hike must be activated by March 11 in order to make use of the full time period. So, in other words, 7-day cards are valid through March 17 and 30-day cards are valid through April 9. Cards not in service by then must be returned to the MTA for a refund. The Times has a bit more on maximizing value.

On the other hand, pay-per-ride cards don’t run out until the expiration date on the back. Take advantage now of the seven percent bonus to load up those pay-per-ride cards. Plus, it’s not a bad idea to stockpile all MetroCards. Since riders can now put both time and money on their MetroCards and are assessed a $1 fee on new card purchases, it’s not a bad idea to hold onto those MetroCards will expiration dates far into the future. My current 30-day card, for example, runs out of time next week, but the card itself is valid through March 31, 2014.

I’m not very good at math. What are the various key purchase points for pay-per-ride and break-even levels for unlimited ride cards?

Fear not, arithmophobes: The Math is getting easier. The new 5 percent bonus means that a $50 purchase will net the straphanger one free ride. Pay for 20; get 21. No more complicated equations with odd-number purchases. (And yes, the MetroCard Vending Machines should be programmed to give this info to customers, but they aren’t.)

With the new pay-per-ride discount, the per-swipe fare is effectively $2.38, and at certain points, it becomes more cost efficient to use eliminated ride cards. For 7-day cards, that breakeven point is 13 rides, and for 30 days cards, the breakeven point is now 48 (down a few from the current value). In other words, if you plan to take 13 or more subway rides in a seven-day period or 48 or more in a 30-day period, buy an unlimited ride card. And needless to say, a 30-day card is always a better value for frequent riders than four 7-day cards.

What’s this new $1 surcharge and how can I avoid it?

For a few reasons — environmental, cost-savings, because they can — the MTA is instituting a $1 surcharge on all new MetroCards purchased at MetroCard Vending Machines, from a station booth or at a commuter rail station. To avoid the fee, keep refilling your cards, buy your cards out-of-system or enroll with a transit benefit organization, if available. Customers will not be charged to replace cards that are damaged or expired.

Along with this $1 fee comes innovation in MetroCard technology. Cards can now carry both time and money, but with a caveat: When both can be used, time will always be used ahead of money. Still, you can carry cash on an unlimited ride card and use that cash for PATH or the AirTrain. More details are available in my post here.

That’s all well and good, but why are the fares going up? What can we do to stop it?

Pick your poison: The MTA says ever-increasing pension and healthcare obligations are driving fares up, but the agency’s debt obligations and bond pricing deals carry the blame too. I’m not going to give you a full answer to this question but will instead urge you to check out my next Problem Solvers session on just this topic. Gene Russianoff and I will be talking up the ins and outs of MTA finances at the Transit Museum at 6:30 p.m. on Wednesday, March 13. Find out where your hard-earned dollars are going while learning if the city can possibly stave off future hikes.

Categories : Fare Hikes
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