![The MTA budget documents released yesterday show how aggressive cost cutting and fare hikes could eliminate nearly all potential deficits through 2017. [pdf]](http://bkabak.wpengine.com/wp-content/uploads/2013/07/MTABudget20142017.jpg)
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.
78 comments
One of the things the Metrocard has done appears to be the same phenomenon you see with people and their credit/debt cards — when there’s not a direct cash transaction, and you’d basically doing some sort of electronic funds transfer, you tend to be less focused on the individual amounts spent. If we were back in the days of the token, where most people were making cash transactions at the booth every day or two, I suspect the MTA’s plan for a series of fare hikes in perpetuity would be met with a lot more protests than if the fare deducted is just being increased on the Metrocard (i.e. — if you’re paying every day and it’s costing you more, it’s an everyday annoyance; if you’ve got a monthly Metrocard, your focus on being irked by fare hikes pops up only 12 times a year).
How long the MTA can keep doing it while the riders remain docile is another question. I suppose as long as the system doesn’t slip back into the morass of the 1972-84 period you may not see fare hikes tied to declining services become as big a political issue as it was back then, but sooner or later, hikes outstripping the inflation rate are going to get push-back, even if many riders are only seeing the bill every 30 day or so.
I love the NYC Subway, it’s the main thing I miss when I leave the City.However, try living in London! £15 ($25) a day capped to travel around the system. It’s expensive, but it’s clean, reliable, and pleasant in most stations. A great subway system needs to be sustainable. I would love to pay $2.50 to ride anywhere in London! You guys don’t realise how cheap you have it! Clean, well managed, and safe subways need a reliable source of income. Increasing fare hikes by 25c or so is seriously nothing to wine about. If you’re really squeezed that much, try skipping on that extra 50c shot you put in your coffee everyday. 😉
except more and more of that fare will go to pensions and medical benefits of people who retired in their 50’s unlike most of us working stiffs. not on the actual service and infrastructure.
just checked the tfl website so I can understand what the price cap means. you can ride any means of tfl transit (which includes what new york would call commuter rail) as many times as necessary and pay only that cap price in one day. thats a rather poor comparison to our single fare of $2.50 for one subway ride. also you’re using the price cap fare for the farthest possible travel distance.
To be rather fair, they don’t really have free bus-subway transfers, and I don’t know a single case where anybody would be using $15 worth of trips in a day.
LOL – my family in England think everything in NY is “cheap”. You are correct though – you get what you pay for…
London is ungodly expensive about pretty much everything.
To get clean stations the cleaner would have to actually do something. Here, the end of route and daytime station cleaners make a cursory appearance in the act of work, while refraining from any evil cleanliness and productivity. Power washing is done at night, but never removing the tar/gunk spots which retain filth.
Gotta stick it to the Man and all that.
What that editorial ignores (but Ben you have pointed out) is that the 30-day card was probably too low at $81, so even though the increase from $81 to $112 has outpaced inflation, that’s not really the whole story. I do think they’re closer to the “right price” now, so I would tend to agree that fare increases from now on should be fairly close to inflation.
You have a point, but most transit agencies underprice a 30 or 31-day pass to entice ridership. The MTA on the other hand is trying to descourage the use of the product that has the greatest value for most of the riding public.
$112 for 30 days is still a great deal. It would be a great deal at $150 for a lot of people.
Vancouver prices zone-1 single-rides at $2.75 (or $2.10 if you buy 10 at a time) and unlimited monthlies at $91.
Is that in US or Canadian dollars. If that’s Canadian dollars, the monthly would be about $94 US at todays exchange rate wich isn’t too bad.
Canadian. In purchasing power parity terms, a Canadian dollar is equal to about US$0.80.
No, its not a good deal. The latest figures of MetroCard sales shows the 30 day is decreasing!
It is freaken expensive!
It’s a good deal if you make 49+ trips per 30-day period. If your commuting pattern is 40 trips per month, rush hour only, then you’re better off paying $90 for 40 rides.
Of course, if you ask me, it would make more sense to just treat an unlimited as buying that many peak time fares (very few people will use more than 2 peak time rides/day) without the bonus in exchange for unlimited rides at off-peak times. But they should probably raise the base fare to encourage more unlimited use too.
This is basically what I was going to say as well – the $81 price point in 2008 is an arbitrary starting point chosen in order to make the rate of increase look egregious, rather than looking at the full scope of historical prices (so maybe “arbitrary” isn’t the right word, but you get the idea).
A couple of weeks ago in Moyers & Company, the MTA popped up. The conversation initially focused on the mass effect of the Brazilians in their uprisings versus the apathy we have here in the U.S. At the same time, the focus shifted to who does the media and journalism cater to? The snippet below begins at 12:16 in the linked video:
I’ll let Marty Kaplan speak for himself (who I agree with for the most part, if not totally). Some here will probably not be surprised by his points, but the interview was one of the most enlightening I’ve seen in recent memory.
There are many extensions of New Yorkers’ jadedness beyond the transit hikes: among them, the fizzling out of the Occupy movement, the (lack of) effectiveness of the financial bailouts for the U.S. economy and individuals in general, the unsatisfying mayoral candidates, the seemingly imminent closure of a hospital in the city (in Ben’s neck of the woods, coincidentally enough). On the other hand, enough people are able to pay more to cover the fare hikes and the fares are cheap enough for most customers, outside of the lower class. So when will a tipping point occur, who knows? But the probability will be greater when more of the middle class take up the cause, when the media can get involved again.
Quit the whining
There are also riots in Indonesia and other places when the subsidized price of gas is increased. Here gas went from under $2 per gallon to about $4 per gallon, and yet no riots. Although the media did use the price as a cudgel when the wrong party was in power, and now $4 per gallon is no longer notable. These loons are pining for riots when prices go up? Charming.
They “used it as a cudgel” when it was new and controversial. The price has pretty well settled into its current pattern even before the black Tweedle Dee replaced faux cowboy Tweedle Dum, for reasons that partially include more expensive extraction. People have adjusted, and American auto use has been going down. I don’t see the major issue with that.
Anyway, people should riot more. People like John Pike may not give a shit about the harm they cause other people, but they damn well act more politely when their antisocial behavior is answered with a mob ripping their arms off.
This is so wrong I can’t even begin to describe why. But for just one example, look up how the cops responded to race riots. Hint: it wasn’t polite, unless “baiting every black person in the city so that you have an opportunity to beat the crap out of them” is what your dictionary has under “politeness.”
Sure, they behave that way when they know they have numbers on their side, which is relatively easy with a large crowd of cops vs. a small crowd of young black males, or if they know the crowd isn’t willing to defend itself (e.g., #Occupy). At least as often as not they stay away from militant black blocs and Panthers and the like, preferring to pick on peaceful protesters. Why? The former often give as good as they get.
Hell, even gun-wielding teabaggers cow them, though admittedly that might be because of sympathy….
Cops always treat right-wing violence more kindly than left-wing violence. It’s not fear; it’s sympathy. Left-wing violence gets punished savagely, and when cops pulled out of poor minority neighborhoods in response to riots, they’d still beat and harass protesters, they just didn’t respond to ordinary 911 calls promptly.
Cops hate revolutionaries, which teabaggers still are not. As nationalists, Panthers are technically right-wing, but they want to overthrow whitey. American political categories probably can’t account for things like Nazbols (flag says it all); these were the lowest rung of the ladder in 1990s online fascist circles, being hated by Europeans for adopting a “Jewish” symbol and hated by American white power types for being godless communists. )
that’s more to do with the levels of normal unrest in the favelas than it has to do with the media. New Yorkers used to have no problem rioting in the past… I’d like to think it’s maturity. I don’t think any of those pontificating journalists would want to stay long in any of the favelas in Rio or Sao Paolo
Why don’t Americans riot as described above?Over use of perscription medications, candy crush & reality TV.
true… but in Oakland and St. Louis they will riot…. not for transit of course. Today in Huntington Beach, California there was a small riot after a surfing competition… still have no idea what that’s about.
Remember OWS & the riots in Oakland? Oakland has a high degree of poverty in the city causing serious problems & distrust with the police. St. Louis has similar issues, but not to the same degree. I recall some years ago there were noted problems with the police in Cincinatti & there was rioting there as well.
I give Tom Prendergast credit for his honesty. We can no longer run up the Credit Card and put off paying for our obligations (such as pension and debt service), while at the same time, expect to keep the basic services we have now (let alone, an increased amount, while building facilities that have every kind of amenity known to man, which is what politicians and special interest groups want). What we are currently seeing in Detroit, is exactly this. They owe billions to former employees, cannot provide basic services to residents, and found out no one (not even Obama), will be bailing them out. We need to realize no bailout will come, accept the fare increases, fulfill our obligations, and keep moving ahead, and upgrading (such as building the Second Avenue Subway), otherwise it may be a return to the dark days of the 1970’s. That requires leadership, and guts like we are seeing with Tom Prendergast.
If you were to go back to the early 1990s, you’d get a very different picture.
Per ride fares were slashed radically relative to inflation between 1995 and 2002, thanks to free transfers, unlimited ride cards, and Metrocard discounts. Are they back to where they were, adjusted for inflation, or higher? Go back in time and ask that question, rather than starting in 2008.
And you know what, they’ll have to be even higher. Why? The money to cut the fares was borrowed, and now riders will have to pay it back.
Moreover, the fare increases n excess of inflation are necessitated by the fact that public employees have become much richer — in retirement benefits not cash — relative to other workers. Thus, other workers have to pay public employees more while charging them less (overall inflation). No one wants to hear this, but it is so. Pushing up the minimum wage may reverse part of this — those at the bottom would better able to afford transit, while transit workers and retirees might see their cost of living rise.
The elimination of “two fare zones” was a huge change. There is quite a mass of people who have to transfer from bus to subway, and they got an effective 50% fare cut when that change went into effect.
and that got people to take the subway instead of drive. if there are no free transfers and i have to take the bus and the subway to work and back at say $10 a day. why would take the subway instead of drive?
unless you work in midtown you can buy a garage space for $250 or $300 a month. a little more than the cost of the train and bus. even then you can park cheaper outside the CBD and walk an extra 10 minutes
“A little more”
Um, what? An unlimited monthly costs $112. The private garages are expensive to park in daily – $15+ an hour – and renting them monthly is closer to $300-400. Not to mention, it is entirely possible to be productive on the train and bus – if you’re productive behind the wheel, that’s called “distracted driving” and is illegal.
Plus, inbound traffic (if you’re too cheap to pay tolls) is horrendous and stressful to deal with. People choose the subway because it’s more convenient.
“it is entirely possible to be productive on the train and bus”
Do people who say this actually ride trains and buses? What percentage of people are doing any work riding (generally standing) on a train or bus? Leaving to one side the fact that many jobs don’t lend themselves to work in transit (how does a nurse get work done on the bus?), this trope has nothing to do with how people actually use the system.
It’s possible. I see people studying, reading, and typing on the train all the time. Doing any of those things in a car is impossible.
Just because it’s possible doesn’t mean everybody (or even a lot of people) choose to do so. What’s important is that the choice is available.
Well, if your work includes a lot of reading, and you can read on a train or bus, sure. So, yes, it’s possible for students and some white collar workers.
I would say: it’s pretty easy to white collar productive on Amtrak, but harder on transit or buses.
I’ve prepared lectures while riding the bus. Usually sitting, but sometimes standing. I’ve graded midterms on SkyTrain. I’ve worked on papers on 15-minute New York subway rides. Not everything is done at rush hour.
the OP said it was a mistake that we have unlimited metrocards and free transfers now.
i remember the days before the metrocard and the free transfer. that’s why people drove. by the time you paid for every leg of your trip, driving wasn’t that much more expensive.
the unlimited rides and transfers is what brought all the extra riders to the subway this last decade.
I agree that unlimiteds helped, but the system probably still would have grown safer and more reliable regardless.
If you ask me, the next fare increase should just include a 2 hour time limit or something on one fare and let people transfer as much as needed. It’s a completely arbitrary charge to charge for transfers. Factor it into the fare.
How about instead of a high expectation of inflation (7.5 percent over two years? Huh, since when), we index the fare to changes in the gas tax?
The gas tax hasn’t been raised since 1993. That’s why the Highway Trust Fund is broke (both the state and national ones).
There are places where roads were turned back to gravel because the communities couldn’t aford to maintain them. I shutter to think what would happen if the interstate system fell to that level. Oh, waight! It already has in the twin cities.
The meer mentioning of raising the national gas tax would send a good portion of the voting public into such a frenzy that it would be withdrawn quickly. After all roads pay for them selves, right?
I’ve always wondered why the gas tax wasn’t just reclassified in terms of a percentage of the cost of fuel(e.g. something like 5%, instead of something like 20 cents per gallon), that was it auto-indexes to inflation.
The federal tax hasn’t been raised, but state taxes have been raised, in some cases by very large amounts.
Thats the point! If drivers get 20 years of fixed (government0 costs, so should other transport users.
The likelihood of the federal government subsidizing transit operations to the extent of Interstates is extremely low (and under current federal law, illegal.) States and cities are now deferring maintenance on roads. Remember the last time we tried that with the MTA?
Thanks Obama
Younger generations aren’t driving anyway, because they are too poor to do so unless they work on Wall Street or have a parking placard from the government job.
More specifically, unless they’ve been given a company car. It’s not just not being able to afford to drive, it’s not being able to afford to have a car at all.
i used to be the same way
wait till they get married and start to have kids. they will be buying cars and moving to the burbs or away from the hyped and overpriced neighborhoods where the schools aren’t any good
That was the case not all that long ago, but not now. Read about the current trends. The current generation of 20, 30 & even some 40 somethings are tired of the suburban car dependent lifestyle & want another option. That’s why Hoboken has become so popular along with increasing use of the railroads here for local travel.
The people moving to Hoboken for a “quasi-suburban” lifestyle will head for the hills as soon as their children are school age.
Not to mention, most of them aren’t so allured by car culture. Who likes getting stuck in traffic?
Brazil raises subway and bus fares nine cents and the country catches fire in a weeks long riot until the fare is reversed. The MTA announces fare hikes more or less in perpetuity and we lodge an angry comment on the internet.
A big difference is the fact that our mayor (love him or hate him), takes the subway to work every day, as opposed to spending millions upon millions of taxpayer dollars on making his commute via aircraft. That was one of the sparks that ignited that Brazilian powderkeg.
Corrected.
At least he tries. A+ for effort?
It’s not gym class.
Except his Spanish is an F.
Brazil has a much greater inequality and poverty problem than we do. What we consider our poor are a lot better off than the poor in other countries.
and in Brazil (similar to my home country) the police don’t bother with stop and frisk… they go in blasting to the ghetto areas with no mercy… because those rioters would have no problem killing police either. I don’t think you’d want to live in that. If you do – my family has a couple houses you can rent.
The whole point of stop ‘n frisk is probably to goad people into defending themselves, which gives police a ready excuse to deliver a merciless beating. It’s a paper thin legal thin legal pretense as is, and they cheerfully dispense with it in protests and skip straight to the beatings.
It may not be as bad as Brazil (
yetright now), but American policing is already well into the extrajudicial territory.Not sure if you grew up in NYC or not… but the NYPD used to be much more brutal years ago… and more lethal too (those numbers you can check).
I remember when Anthony Baez died back in the 90’s… that’s when things started to change. That type of stuff was a regular occurrence back then – just that he happened to die. That’s not to say that the guys in that neighborhood were “nice guys”… I used to be only a few blocks from where it happened… many of those guys used to shoot it out with the police… which if you recall they shot the captain of the precinct in retaliation for the officer who killed Anthony. Most of the guys then were not innocent doves… Just a year or so before that just few blocks away – four guys carjacked someone on the Grand Concourse and killed one of the cops chasing them. Those were dark days… and the police were most certainly out-gunned. NYC as a whole is much more docile now… “police and thieves” as the old Jamaican song goes.
Perhaps, though I wasn’t commenting on whether things were worse. What I’d be interested in is changes in arbitrary brutality/lethality; comparing lethal force numbers in 1990 to 2013 is a bit useless if you can’t see the rationale behind the use of force, and judge whether it was “reasonable” – of course, guess who usually makes that determination.* The jarring change, for those who pay attention, is the way prima facie brutality is rationalized as okay even when it’s documented beyond any reasonable doubt – and that may not be a change at all, but cheap video cameras and social media have shed light on it.
* go figure: stop ‘n frisks aren’t counted as assaults, either.
You can’t even get insurance on your car for $115, much less car payment gas and parking. The MTA is an incredible deal at double the fare.
My car (when I had a car) did not reek of urine and did not pump into my lungs the sum of 100 other people’s sweat and whatever else they were effusing.
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Nor was the car 115F while waiting for it to arrive. Even after baking in the sun it was not the misery of a summer subway platform – toss on windshield and back window reflector shades, open your sunroof to vent position and it moderates the heat gain quite well.
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The car also didn’t die nearly every night and weekend, taking a hour to get five miles as the subway often does after maintenance hours start.
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Costs more? Much more in total. Value/dollar? No question the car wins. Outside of rush hours the car delivers positive value rather than an assault on your system.
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Let’s do the math. On 11/12/1992, the fare was raised from $1.15 to $1.25, an increase of 8.7% after two years at $1.15. It was one of the few instances in history when “save the fare” politics was not followed by a truly massive fare increase of 25 to 100 percent.
In today’s money, $1.25 in 1992 = $2.08 in 2013, according to the BLS.
So what is the average fare right now, net of discounts, including the unlimited ride and free transfers? The pay per ride is $2.50, but the purchase discount brings it down to what $2.38? But you get the free transfers. And unlimited rides are an option.
It’d be nice to work out, but also harder than you’re imagining. Free transfers have restored many trips on former train lines that were simply bustituted, too. Something like two buses got free transfers to the subway as rapid transit was scaled back, but most didn’t.
It’s ultimately a smaller, more expensive (for its users*) system than it was at its peak.
* another dimension: more expensive by percentage of their income?
Free transfers on bustitution lines were always provided – the Bx55, B42, and the line that replaced the Myrtle Av El all had free transfers.
As for the rest of the Els, Ninth and Sixth were replaced by the IND out of Hylan’s spite. The demolished segment of the Jamaica Line was replaced by the Archer Av subway. The only two Els that weren’t replaced were the Manhattan segments of the Third and Second Av Els (which were supposed to get a subway) and the Culver shuttle, which fell apart. Those are all the TA-closed Els – the BMT closed an El, but that was because it extended another El which made the first one redundant.
Ah, yeah, there was a transfer at Jay Street to the B54 (which actually replaced a streetcar, not the parallel Myrtle El). No transfer was provided at Broadway though. The B42 is the last remnant of that system, with the transfer to the subway actually being made within fare control.
I can sort of buy your argument about the Sixth Avenue El, maybe the Ninth, though it’s a long block away from Eighth. The lack of such transfers on the east side is a bit absurd. Still, the new services never perfectly parallel old ones.
There was also the Lexington Avenue El in Brooklyn, now paralleled partly by the B52 I believe.
My solution is not to wreck the system by holding down the fare. It is to have a higher minimum wages in Manhattan. Those who live and work there can afford it.
I’m not talking about what to do or not to, I’m talking about drawing comparisons with the past (accounting). Throughout the system’s history, transfers have been used to replace routes that were abandoned.
The bottom line to everything is pension and healthcare costs are too expensive for the state not just for MTA workers – but across all departments (same with the city). Unless those are dealt with in a meaningful way – it will be the same song and dance.
Apart from that – if congestion pricing doesn’t pass – then at the least the East River bridges should be tolled.
Just remember, the NYC schools are being re-destroyed primarily by retroactively enhanced pensions, though debts also play a role.
But New York City Transit would be re-destroyed primarily by debts, though retroactively enhanced pensions also play a role.
Why are pensions less damaging to NYCT this time? Because when the TWU went on strike for 20/50, they didn’t get it, but the teachers did get years knocked off their service time, which no money had been set aside for.
I’m going to repeat what I commented on an earlier post:
“What I suspect will happen down the line:
The majority of the transit riding public will pretend to begrudgingly accept the fare hikes and accordingly, pretend to pay the fares and even the fines for non-payment.
It’ll become one hell of a feedback loop!”
The MTA is trapped.
Keep increasing fares and fees with the assumption that the economy is “improving” (it isn’t – unless you are in finance or government milking this bubble for all its worth. Our country blew its opportunity to actually do so back in 2008) and that the majority of its current riders will be able to shell out (unlikely with the bubble-fueled inflation wreaking havoc on cost of living and decreasing nominal incomes) – the MTA will price themselves out of existence. It’s a tragedy in the making.
It’s 2013!! when are we going to replace motormen/operators with robots already!!?!? that would solve the whole issue of pension costs, etc!! plus robots aren’t surly and lazy and uneducated!