Micheal Bloomberg, our third-term mayor who campaigned into office on the back of a platform of transit reform, has been noticeably silent as the MTA’s finances have come crashing down over the last ten days. He hasn’t pledged more support for the beleaguered transit agency, and although his appointees on the MTA Board have vowed to vote against the service cuts, that is largely a symbolic moved aimed to shore up support amongst parents who are dreading the end of the Student MetroCard program.
Yesterday, Bloomberg broke his silence in a way. While at the climate talks in Copenhagen, the mayor stressed the need for congestion pricing in New York City. “I don’t think that congestion pricing and those kinds of things are dead; more and more cities are doing it,” he said while on with CNBC’s Squawk Box. “Next time, come March, [the legislature is] going to have to balance a budget, and I think any kind of revenue source is going to be on the table, and it may in fact still get done.”
Later on, the Mayor tied his congestion pricing plan to the MTA’s current financial woes. Although he didn’t offer up anything more than an “I told you so” comment, he has a point. “You see all of the cutbacks in the MTA budget. The MTA has got to find another source,” he said. “If we had done congestion pricing two years ago, perhaps they wouldn’t be in this situation.”
The Mayor’s comments led me to some thoughts on user fees and service cuts. In the parlance of those who study economics and society, user fees are as they sound: They are charges — fees — of use for public goods. Congestion pricing is a user fee because it is a charge levied on drivers who use the roads, contribute to congestion and bad air quality and lead to overall reduction in economic efficiency in transit-focused areas. Subway and bus fares are user fees because they are charges levied against those who ride public transit. The money is, in part, used to offset the costs of operating the system or, as in the case of congestion pricing, used to offset the societal costs of unnecessary driving.
With user fees, those being charged can oftentimes pass along the costs. If the city were to institute congestion pricing, people who have to drive — delivery vehicles, plumbers, taxis — can simply charge those who are relying on their service for the fees. A plumber based in Williamsburg who makes 15 calls a day — say, seven in Brooklyn and eight in Manhattan — can raise his rates slightly per customer to cover the planned $8 congestion fee. Implemented properly, user fees should maximize the societal benefit from the use of public goods.
The MTA has another option when it is faced with a legal mandate to balance the budget. It can hold user fees steady but provide less service for the same price. Since the agency has promised not to raise fares this year, their only choice is to cut what they offer. Does this, I wonder, make sense?
As a transit-based city — the “most transit-dependent city in the country,” as Andrew Albert said — we as a society are better off with more service. (In fact, that is the beauty of the MTA’s capital budget, but more on that later today.) As a 24-hour city, we need the trains to run efficient service patterns that minimize transfers and waits. We need the buses to provide service where the subways do not and cannot run. We can’t afford to see longer wait times, more crowded trains and fewer buses. We are a service-dependent city used to paying user fees for a barely acceptable level of that service.
In the end, this digression leads me to one conclusion: I would prefer a fare hike — or better yet, congestion pricing — to cover the MTA’s current budget gap while the service cuts are pushed off the table. I will continue to advocate for the end of the MTA’s subsidies of the student MetroCard program; that is very much the city’s and state’s responsibility to fund. But in terms of increase midday headways and reducing weekend service, I will advocate for user fees instead. It might cost us a few dollars more, but it is an investment well worth it for the financial well being of the city as a whole.