Home Fare Hikes With fare hike on tap for ’09, NYS legislature must fulfill old promises

With fare hike on tap for ’09, NYS legislature must fulfill old promises

by Benjamin Kabak

The MTA, in an effort to close a projected budget gap of nearly $900 million, plans to raise mass transit fare revenues in and around New York City by as much as eight percent in 2009. This increase — the second in two years — would mark just the second time in subway history that the fares have risen in consecutive years.

William Neuman of The Times has the nuts and bolts behind this dismaying but predictable turn of events:

Though the precise amount of the fare and toll increase has yet to be determined, the authority will seek to increase the revenue it gets from those sources by 8 percent. If approved by the authority’s board, the increase would take effect next July and would follow a toll and fare increase in March of this year…

On Wednesday, the authority will unveil a preliminary budget plan for 2009 that calls for the fare and toll increases and outlines other measures to balance its budget, including more than $300 million in additional financing that the authority hopes to get from the city and state. Coming at a time when the state and city budgets face extreme financial pressure as well, those requests are likely to be resisted by elected officials.

The authority faces steadily rising costs, particularly for fuel, as well as sharply declining tax revenues due to a slowdown in the real estate market. Just six months ago, the authority predicted that its shortfall for 2009 would be slightly more than $200 million, less than a quarter of its latest projection.

News reports and commentary surrounding this fare hike announcement will trumpet the populist story. The MTA is putting a financial onus on their riders with this planned increase at a time when the U.S. economy is hitting a low point. But the real focus should be on our elected officials and their reactions to the calls for more money.

First up, we have the MTA’s requesting that the city kick in more money, and the city ain’t too happy about that. “City taxpayers aren’t in a position to increase our subsidy over the billion-dollars-plus we already provide each year,” Stu Loeser, a spokesman for Mayor Bloomberg, said to The Times.

Loeser noted that he eagerly anticipates the findings and recommendations of Richard Ravitch and his blue-ribbon panel tasked with magically finding hundreds of millions of dollars for the MTA. Those findings, however, are not due until early December. The MTA Board will have to act before then to combat the impending budget-deficit tsunami.

Next up is the anticipated reaction from the state legislatures. During the build-up to the most recent fare hike, numerous state legislatures told the MTA that if the transit agency were to ask for more money, the legislature and our elected representatives would do the best they could to oblige.

But Neuman’s article makes it clear that the New York State legislature is not too keen to find $300 million for the MTA. So the legislature has shot down congestion pricing — one source of well over $300 million a year — and now will be reluctant to grant the MTA enough money to meet its balanced budget requirements. Blame the MTA all you want, but this sytem in Albany and City Hall, folks, is broken.

The MTA will do what it can to make ends meet, but all it can do is raise the fare and cut services. The agency anticipates drawing in an addition $200 million via the new fare structure, which will be formally announced at a board meeting on Wednesday. But that still leaves it facing a $700-million gap in its operating budget. This money has to come from somewhere else because to cover this gap through farebox revenue would require increases of nearly 33 to 50 percent. Those figures would start riots in New York.

This fare hike news boils down to one: Our elected officials should be funding public transit and making good on promises they made just six or eight months ago. But on Tuesday, they will once again get a free pass. New Yorkers are sure to pile on the MTA for its supposedly poor bookkeeping and its fare-hike deception, but the MTA is just a victim of a bad economy. Those running the agency aren’t happy to see fuel costs skyrocket, and they aren’t happy to see their budget deficit projections increase fourfold.

But the real blame lies in Albany as our elected officials — chosen by us but seemingly responsible to no one — yet again starve a public transit system vital to the economic health of both the New York Metropolitan Area and the entire state. Don’t forget those representatives when the fare hike comes along next summer. Don’t forget them each time you swipe your MetroCard, and don’t forget them ever time more money is deducted from your wallet. The blame for this fare hike news lies squarely on their shoulders.

Blue MetroCard image courtesy of flickr user Runs With Scissors.

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ScottE July 22, 2008 - 9:35 am

To add to the above article, Newsday posted a breakdown on how the MTA plans to balance the books without service cuts. Copied below:

$45 million: Internal belt-tightening over the next four years
$135 million: Borrowed from an account that funds retirees’ medical costs
$120 million: Unspent funds from a 2006 surplus
$10 million: Capping subsidies to Long Island Bus at $10 million ($20 million spent this year)
$10 million: Asking other city and state agencies to pay for their employees’ E-ZPasses
$60 million: Expected elimination of federal mandates
$100 million: Greater city and state subsidies for students’ and seniors’ fares
$110 million: Increased city funding for paratransit
$60 million: Tax restoration from state for revenue MTA expected but never realized
$50 million: Closing tax loopholes
$200 million: An 8 percent fare hike in mid-2009

Some of these sound long overdue (internal belt tightening, spend the money from an ’06 surplus, greater city/state subsidies for students and seniors) while others seem downright irrresponsible (borrow from retirees’ medical funds, eliminate compliance with federal mandates).

I truly believe that a restructuring of how things gets done is in order — the amount of waste over there is unbelievable. I’ll give Sander credit for attempting to right the ship, and its a big job to infuse new cultures in an old, stodgy organization.

About a year ago, I saw an ad in the legal section of the New York Post. The MTA was soliciting bids for a contractor to “furnish ten pairs of work boots”. Bids were due, signed and sealed, in their offices by a certain date. Someone would then review the bids and award the contract. Eventually, the boots would be provided, at a likely exhorbitant cost to the MTA and a windfall profit to the provider.

Wouldn’t it have been much easier and much cheaper to send someone to the Penn Station K-mart?

Ed July 22, 2008 - 10:19 am

What is the policy justification for subsidizing students’ and seniors’ fares? I realize these groups are short of funds (not so much the seniors) but why not subsidze them and not the indigent generally.

Its not that its not nice to do this, I’m questioning whether it should take priority over updating the signal system, or even repainting the stations, if it comes to that.

Ian Turner July 22, 2008 - 10:40 am

As a requirement of recieving federal funding, the MTA is required to provide a discount of at least 50% to seniors during off-peak hours. I’m not sure about students.

Todd July 22, 2008 - 11:24 am

to cover this gap through farebox revenue would require increases of nearly 33 to 50 percent

Damn. Makes 8% look pretty good in comparison.

ScottE July 22, 2008 - 3:47 pm

When I posted my comment above, I thought the CITY was supposed to subsidize the fares, not the MTA — and that either the city wasn’t paying or the MTA wasn’t collecting.

I was not trying to suggest that the discounted fare programs be eliminated.

Benjamin Kabak July 22, 2008 - 3:53 pm

Scott, you do raise a good point. The MTA is getting fleeced by the city in its dealings with student MetroCards actually. The city and state each contribute $45 million to the MTA to cover the costs of these cards, but the total cost to the MTA is $71.5 million more than that $90 million our government contributes. (You can read more about that in this post.)

You’re right; the city and state should be meeting their financial obligations to the MTA, and right now, they just aren’t.

Second Ave. Sagas | A New York City Subway Blog » Blog Archive » As train delays mount, MTA hunting for a source July 22, 2008 - 4:17 pm

[…] news of the fare hike dominated the papers this morning, another big story concerning train service made the front pages […]

Second Ave. Sagas | A New York City Subway Blog » Blog Archive » Fare Hike 2009: What the pols and papers are saying July 23, 2008 - 12:46 pm

[…] Within the same piece, state officials are threatening audits of the MTA’s books and are exhibiting exceptional grandstanding talents. “We are not at the point now where anyone should be talking about a fare increase,” Richard Brodsky, the Assembly representative who told the MTA he would deliver more money for the financially strapped transit agency, said. To him, I say, again, show them the money. […]

Ronnel Alfred November 22, 2008 - 2:05 am

Does any one know where i can find a blue metro card? i need it for a scavneger hunt n i have no clue where i can find one


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