With the $1 fee, an expected decline in fare media liability

I have, I must confess, a problem. I can’t throw out MetroCards any longer. I receive my 30-day card through a WageWorks, and I don’t pay the $1 surcharge each month. Still, at the end of the month, I can’t bring myself to throw out the empty card; it’s like flushing a dollar down the toilet each month.

The MTA’s $1 surcharge is something of a new creation. Discussed for years, it arrived in February with some fanfare. Initial coverage indicated that the MTA had made more money than expected as New Yorkers grew accustomed to reusing their empty MetroCards, and litter around turnstiles seemed to vanish as well. By August, the MTA estimated that the total impact on its bottom line would be a net gain of a hair under $20 million as the total from fare media liability — the industry term for unused but prepaid MetroCard balances declined.

So how’s it doing? Based on the numbers available, everything seems to be on target, but that’s not, surprisingly, the gist of this post from the IBO. Doug Turetsky of the city’s Independent Budget Office offers up his take on the perception of a decline in fare media liability and the overall impact of the $1 surcharge. He writes:

Last year, the jar was pretty full since it held more than $95 million—an unusually large amount that resulted from transit riders stocking up on MetroCards prior to the December 2010 fare increase and then some of those cards expiring with funds left unused…But the jar may not be nearly as full in the future. The reason is that in March New York City Transit started to charge riders $1 every time they bought a new card rather than refill the one they already had (at least until that card expires and you can then get a free replacement). The transit agency expects fare media liability will drop to the more typical amount of about $52 million this year and, with a full year of the replacement fee in place, fall to $41 million in 2014.

…as the transit agency’s financial plan anticipates, there will still be a stash of unspent change on expired MetroCards. Some of that will come from tourists and other short-term or occasional riders who buy a card and wind up not using all of the money placed on it.

Many everyday riders also will contribute to the ongoing accumulation of fare media liability. The transit agency’s method of providing discounts ensures this…Many cards are likely to be lost or forgotten before the 5 percent bonus adds up to a ride or they will expire with an odd amount left on them. Although the transit agency gives riders two years to replace an expired card and have the funds on it transferred to a new one, many old cards are also likely to slip away with unused value.

These findings from the IBO aren’t a surprise. Since unveiling the so-called green fee in 2011, the agency has made clear that fare media liability would be likely to decline by around 20 percent while the fees and savings in MetroCard production costs would more than off-set the revenue loss. Whether it’s more honest to balance the books on a $1 surcharge or the expectation of unspent MetroCard swipes is a question I’ll leave up to you.

Meanwhile, I have 11 MetroCards accumulating all over the place. I’ve used one or two of them as pay-per-ride spares to be broken out in the event of an emergency, but otherwise, I guess I’ll sit on them until the expiration date on the back. Eventually, the MetroCard with its artificial expiration date and prickly magnetic strip will be a thing of the past, but for now, that $1 fee seems to be doing exactly what it was intended to do.