At the end of this post is a poll about how you think the MTA should balance its budget. Scroll down or click here to vote.
For 44 years, from 1904 to 1948, subway fares in New York City cost riders one nickel. The Buffalo Head became the symbol of a subway ride for millions of New Yorkers, and by 1948, the five-cent fare had become a political issue. Those running the city’s transit systems could not sustain the system on five cents per ride — or the 1948 equivalent of two cents in 1904 money — but politicians ran populist campaigns focused around saving the low subway fare.
If that sounds familiar, well, that’s because it is. History has a funny way of repeating itself in local politics, and the subways have long been used as a political football of sorts. Fiscal improprieties and fare hikes have been the cause of politicians for decades even as the very same politicians refuse to find adequate funds for the underground veins of New York City.
Recently, we’ve seen all sorts of fare and fiscal shenanigans involving the MTA. When the Board had to raise fares in 2008 to cover an expected economic shortfall, then-Gov. Eliot Spitzer pushed to maintain a $2 base fare while upping the price on the rest of the MTA’s fare options. In 2009, the MTA raised fares by approximately 10 percent as part of the Albany funding package.
And so we arrive in 2010. Nearly a year ago, the agency vowed to avoid a fare hike this year, and we’re seeing that political drama in the form of service cuts play out. Were a fare hike on the table, the agency would be in line to raise the fares in four consecutive years and potentially five out of seven years for a biannual cost-of-living fare adjustment is likely in 2011. This hike — a centerpiece of the Ravitch Report designed to free the MTA from some economic uncertainty — remains up to the discretion of Albany as Ravitch’s recommendations were not adopted.
As the MTA unveiled its fiscal problems to the city in December, the agency clearly did not believe it to be politically expedient to put forth a budget balanced on the backs of a fare hike. In fact, not once did anyone at the authority mention a fare hike. Rather, as the end-of-year returns and 2010 projections rolled in, the MTA quickly embraced service cuts. Although many of these service cuts could be viewed as refinements that should better help the MTA address transit needs, the fact remains that these are cuts through and through. In particular, the Student MetroCards are a prime example of that trimming.
Over the last few weeks, many have asked me why the agency didn’t consider a fare hike and what a hike proposal would potentially look like. We’ll start with the latter question. In general, a one percent increase in fare yield — or money collected — will lead to an increase in revenue at the MTA of approximately $50 million. To cover the 2010 budget gap — estimated right now at around $350-$400 million — the MTA would have to increase fare yield by eight percent. That doesn’t correspond directly to a fare increase of eight percent because of the agency’s discounts, but we could assume an increase of 10 percent. A 30-Day Unlimited Ride Card would probably be nearing that magical $100 mark, and everything else would increase accordingly.
So why didn’t the MTA go this route? As I explained above, politics played no small role in this decision. The agency seemingly did not believe it could renege on its promise to avoid a fare hike this year, and it had a better card to play. By throwing down the Student MetroCard issue and forcing politicians to respond to charges of underfunding student transportation, the MTA could hope to generate more political agita that should result in more student funds. At the least, it’s a safer bet than anything fare related. There, politicians would stomp their feet and approve another fare hike.
In the end, though, we pay through service cuts. We will see train headways increased, load guidelines revised, neighborhood bus routes restructured and eliminated and service generally slowed down. Eventually, we’ll have to pay higher fares or else the MTA won’t be able to sustain an adequate transit network for New York City. With these cuts, the authority is beginning to run up against that boundary.
So in the grand tradition of bloggers who don’t have the right answer to tough questions, I leave you with a poll. Would you rather have a service cut this year or fare hikes? I err on the side of fare hikes simply because services rolled back take a long time to restore; the fares will eventually go up anyway. Not everyone agrees.
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