Fare Hikes

While the Daily News may have scooped the rest of the New York papers with the news on the MTA’s planned extensive service cuts, The Times one-upped the tabloid today. The Gray Lady’s got the fare information, and it ain’t pretty

William Neuman details the planned fare hikes that will compliment the service reductions. While Neuman doesn’t mention the reported $3 base fare, he tosses around a 23 percent fare hike across the board. Yikes.

Anyway, the details:

The Metropolitan Transportation Authority will seek to increase fare and toll revenues by 23 percent next year to plug a yawning budget gap, according to a person briefed on the plan…The result is straightforward and grim: Many riders will have to pay more to wait longer for trains and buses that are more crowded.

The fare and toll increase is intended to raise about $600 million next year, about half of the $1.2 billion deficit projected for next year. The increase would go into effect in June or July.

The authority will outline the budget proposals at a meeting of its board on Thursday, but officials said they had not yet worked out details of how the changes would affect different types of MetroCard fares on subways and buses, as well as fares on the commuter railroads.

It appears likely, however, that the base subway and bus fare would increase to at least $2.50, from $2, and that a monthly unlimited-ride MetroCard could rise to about $100.

I’ll be unveiling a second iteration of last year’s MetroCard Challenge later today to see how this move will impact me (and hopefully you, the user of a 30-day Unlimited Ride MetroCard). Needless to say, while the average price per ride will remain a good deal, no one will be happy about having to fork over $100 for a MetroCard while suffering through potential decreases in service.

For now, we can’t do much to assess this news. The MTA officials haven’t yet hammered out the details of a fare hike. But it is likely that users of the heavily-discounted Unlimited Ride cards will face steep increases as will bridge-and-tunnel users and pay-per-ride MetroCard swipes.

What this latest development ensures is that it will get ugly before it gets better. Already, the TV news stations are cornering disgruntled passengers who seem too willing to blame the MTA instead of elected officials who continue to withhold funding for the MTA. It’s time to reframe that debate and hold the officials who control the purse strings responsible for this mess.

Furthermore, the MTA seems to project the fare hikes to cover just half of the projected 2009 deficit. The other half will have to come from somewhere. Can service cuts and personnel decisions cover the rest? We’ll find out on Thursday.

Later today, New York City Council membrs Joseph Addabbo, right, and John Liu will unveil their latest anti-fare hike effort. As Liu has tried to do, unsuccessfully, in the past, the two hope that their group — Fight the Hike 08 — will succeed in convincing the MTA to avert a fare hike next year.

As part of this campaign, Addabbo penned an extensive piece in today’s Daily News that lays out the campaign’s approach. Ideally, their Website — as of this writing, just a Drupal instruction page — will feature more on how they hope to accomplish their goals. For now, we have just the Addabbo piece, and while on principle I believe their efforts to be noble, I feel that Addabbo and Liu are a bit misguided in their rhetoric.

Addabbo writes:

The cost of living is on the rise, and the state is experiencing financial difficulty, which usually jeopardizes jobs and income. The first answer to a budget deficit cannot always be to increase the cost of living for middle class people, especially without a serious improvement in service and facilities. Just recently, a survey of 50 stations by the New York City Transit Riders Council revealed that riders complained overwhelmingly about the state of disrepair of the city’s subway stations, many of which suffer from water damage, lack of proper signage and peeling paint.

New York City Transit even acknowledged the problem by proposing to include $71 million in their Capital Plan to address problem areas incrementally. Since the Bloomberg administration has already signaled that the city will not balance the MTA’s bottom line, it’s up to the state to prioritize spending in these tough fiscal times and focus funding where it is most needed, and where it’ll do the most good.

We in government need to make high quality, low cost public transportation a priority and send a message to the MTA that we expect to get what we pay for. As legislators return to Albany this week to reassess the budget, I urge them to not only act judiciously, but on behalf of middle class interests. Raising the fare should be a last resort, and I don’t believe we’re at that point.

I appreciate Addabbo’s efforts, but the middle class rhetoric is simply a councilmember’s efforts at pandering hidden in class conflict. Six months ago, Addabbo was an opponent of a congestion pricing on the grounds that the pricing plan would negatively impact the middle class in Queens who supposedly lived too far away from mass transit. The only problem with Addabbo’s argument is that those members of Queens who live too far away from mass transit and must rely on their cars aren’t really a part of the middle class. They’re a bit of the upper class who can afford congestion pricing and choose to live in non-transit friendly areas of New York City.

Again, Addabbo is relying on class rhetoric, and while his argument is more valid when it applies to the transit system, he can’t have his cake and eat it too. If Addabbo is serious about funding transit, then congestion pricing will have to a part of the equation. Raising the fare should be a last resort, but with the city and state eschewing their MTA responsibilities and the economy worsening by the day, the MTA has not choice but to turn to this last resort.

Until our politicians are willing to sacrifice something — whether it be free roads or higher taxes or something else out of the box entirely — the MTA will continue to rely on fare hikes for more funding. It seems to be the only resort these days.

Hot on the heels of last week’s fare hike brouhaha, New York State Comptroller Thomas DiNapoli has announced an upcoming audit of the MTA’s books.

The audit, first reported on Sunday morning by The New York Post, should be completedwithin the next few months, and DiNapoli’s office plans to release a preliminary report in September, well before the MTA Board votes on the fate of the fare hike proposal. “Mass transit is crucially important to the economic well-being of the city, and the MTA has historically not done the best job of managing its resources,” Dennis Tompkins, a spokesperson from DiNapoli’s office, said to The Post “Now it’s more important than ever that they implement every possible way to save money and increase efficiencies in the system before they raise fares on the public.”

Meanwhile, over the weekend, two different stories highlighted the need for such an audit. First, Pete Donohue of the Daily News uncovered 19,000 hours of unnecessary overtime. Some bus drivers were getting paid overtime to complete their duties when other drivers were available but not tasked to the job. Bureaucratic inefficiencies like these have long been a hallmark of the MTA, and as the transit authority streamlines their operations, the agency hopes to eliminate redundant overtime.

Then, on Saturday, shortly before the debut of the new service expansions Donohue reported on the MTA’s staffing of closed stations. Clerks had been manning the booths at 145th and 148th Sts. on the 3 line even though the stations were shut for six and a half hours each night. NYC Transit said that the stations were staffed to prevent vandalism and to “unlock turnstiles if an emergency ever required a train be rerouted to one of the depots.” This doesn’t strike me as the best use of resources.

In the long run, these two stories highlight small issues within the overall scheme of the MTA. The station staffing has cost the authority a whopping $1 million since 2000, and with budget deficits of nearly $900 million a year, one million over seven and a half years hardly seems important. But it’s the idea of it. Time and time again, city and state comptrollers have looked at the MTA’s finances, and time and time again, they’ve recommended ways to bridge the deficit gap that don’t involve fare hikes.

Nearly a year ago, when we were discussing this year’s fare hike, City Comptroller William C. Thompson issued a report highlighting how the MTA, with an assist from Albany, could avoid a fare hike. Included in that report was a study of student MetroCards that found the MTA’s footing more of the bill than it should have been paying. But nothing changes.

DiNapoli can dig and tally up figures. But it always seems that once a fare hike is on the table, nothing can stop it. The MTA will go on spending wastefully in certain ares and not enough in others. That’s just the way it is.

Let’s start with an unpopular premise: The fares for the New York City subways are far too low, and they’re kept at low levels artificially by politicians looking to curry favors with voters.

This isn’t the first time we’ve delved into the philosophy of subway fares. In November, I discussed how a five-cent fare long overdue for a raise still haunts New York City and its quest to fund transit to this day. Now, with the MTA’s calling for a fare hike in 2009 and yet another in 2011, the debate over fares is once again on the minds of New Yorkers.

Today, the base fare for entry into the subways is $2, and due to various discounts, straphangers pay on average $1.38 per ride. That is a paltry amount. Yet, the idea of raising the fare — even in light of what Streetsblog notes are irrefutable facts — is sacrosanct in this city.

On the surface, the fares are low because low fares are popular and make for seemingly sound transportation policy. If the driving forces behind mass transit are environmental — keep people out of their cars — and economic — provide low-cost solutions for people who can’t afford other means of transportation — then low fares are seemingly vital to transit success. Politicians and commuters alike both think they understand this, but when push comes to shove, politicians are loathe to provide the funds our system needs to operate and loathe still to allow for fare hikes.

Low fares, however, are clearly not the only thing keeping people underground. In London, for example, the base fare is £4.00 or nearly $8. Meanwhile, for those using the Oyster Card, the one-zone trip is £1.50 or a hair under $3. Needless to say, the Underground is enjoying record ridership year after year.

I’ll let London keep its zone system and the 19-page brochure they need to explain the various fares. But London proves that relatively high fares an age of even higher gas prices would not drive potential riders away from mass transit. Shocking, I know.

If the MTA were to raise the base fare to $4 and the cost of Unlimited Ride 30-Day MetroCards to $120 — still a meager sum — people would complain, but they would still ride the trains. Under this fare structure, the MTA might make inroads into their budget crisis. But I can see why the Three-Dollar-Fare Platform wouldn’t win me too many votes.

And thus, a key point: Politicians do not want to raise fares. They don’t want to see the fares go up on their watches because constituents will invariably take their anger out on those on the ballot. We didn’t elect Lee Sander; we can’t vote him off the island for raising fares. But we can hold Gov. Paterson responsible for his political appointees who don’t confirm to their expected roles. Sure, Sander may be looking out for the MTA’s best interest and its bottom line. But what about the rest of us who want a good subway system but don’t want to pay?

It’s the same old story with the MTA. They had a budget surplus vanish when real estate taxes tanked and operating expenses skyrocketed — basically the textbook definition of a bad economy. Meanwhile, politicians, falsely claiming populism, opted against congestion pricing, a measure that would have guaranteed the MTA at least $400 million a year annually for operating costs. Noticeably absent from the fare hike coverage is mention of how, with congestion pricing, that $900 million deficit would be cut in half.

And so in the end, it all comes down to sacrifices no one wants to make. Politicians won’t admit that the MTA is not a private company and thus needs state and city subsidies to live. New Yorkers won’t admit that subway fares are low — artificially so — and would still be a good deal even doubled. We want a top-line subway system that’s clean and efficient, but we don’t want to pay. These are irreconcilable differences, and something has to give. So let’s raise those fares until Albany is forced to lay out the big bucks.

MTA officials gathered today for a pivotal board meeting today in which the preliminary budget went under the microscope. In short, the MTA plans to cut costs and workers while raising the fares and requesting more government money to cover a crushing $900-million deficit. Fare hikes are inevitable.

City Room succinctly sums up why the MTA is requesting not one but two fares hikes by January 2011:

In presenting its preliminary budget for the 2009 fiscal year on Wednesday morning, the authority made no attempt to conceal what it considers to be its worst fiscal situation since the economic downturn that followed 9/11. When fares last went up, in March, the authority’s plan was not to have another fare increase until January 2010, with future increases every two years thereafter. Now that entire schedule has been moved forward — by six months for the initial increase and by a year for the projected future increases….

The authority’s leaders said the fare and toll increases are necessary by the confluence of soaring energy prices and a plunge in revenue from real-estate transactions, which are a prime source of the authority’s revenue. The authority is struggling to pay the interest on billions of dollars in debts that have accumulated since the 1980s, but exploded since 2000, to pay for expensive equipment upgrades; debt service alone is expected to consume one-fifth of all authority spending by 2012.

That’s really all there is to it. The MTA is saddled with crushing debt brought about by the need, 25 years ago, to restore the system to a state of good repair and by a marked decrease over that time of contributions on a city and state level. As was the case earlier this year and late last year, these fare increases will happen unless the city and state find a hundreds of millions of dollars to send to the MTA.

True, the MTA could cut capital projects. True, they could drastically reduce service. But the capital budget is separate from this operations deficit, and a lot of the federal money the MTA is using to fund its capital program is earmarked specifically for those projects. Those funds can’t be shifted to cover debt payments. And we don’t even want to touch the issue of service reductions.

The MTA, as I’ve sad over and over again, sits on a precipice right now. It could fall back into a state of bad repair so prevalent in the 1970s, and the New York economy would suffer because of it. It could — with the help of a lot of money — grow and emerge from this slump. Later tonight, I’ll have some thoughts on the state of the MTA’s fares, but for now, we are left facing something of a dead end. An unwilling legislature won’t come up with the funds for the MTA. So the transit authority is left with one recourse: fare hikes. And that’s the state of things.

As the MTA Board debates the financial future of the transit agency and the possibility of an upcoming fare hike — the second in two years — New York politicians and newspapers are sounding off on this hot-button issue. Let’s take a look at what everyone is saying.

We start with Mayor Bloomberg. In a press conference yesterday, Bloomberg slammed the MTA for not showing budgetary flexibility. An agency with a $10 billion, he says, should be able to trim five percent of that without foisting a fare hike on its customers. I wonder if Bloomberg would be up for running the MTA when his mayoral term ends in few months. He has the business acumen to turn this organization around. The video below showcases Bloomberg’s comments:

In Newsday, we see Gov. David Paterson threatening to do “everything [he] can to prevent” a second MTA fare hike in two years. “This cannot become the new way that the MTA solves problems: Every time there’s an issue, pass along the increase to the … riders,” he said. “Let’s explore other options rather than a fare hike.”

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.

The Times largely echoes Newsday but with a focus on the city officials. Both Mayor Bloomberg and City Council — and mayoral hopeful — Christine Quinn both voiced their opposition to the fare hike. While Bloomberg flat-out denied the MTA anymore city funds, Quinn was a bit more judicious. “Before the M.T.A. comes asking for more from the city, the state or the public, they need to do a little more housekeeping, which means cutting their overhead, cutting their management budget and cutting their administrative budget,” she said.

The quote of the day, though, comes from none other than the Congestion Pricing Grim Reaper himself Sheldon Silver: “New Yorkers are facing higher prices for food, electricity and many other necessities, and transit fares just went up a few months ago. We simply cannot afford another increase.” Those increases, Shelly, are exactly why the MTA is facing a budget crisis. But can we really expect New York officials to put two and two together and come up with four?

Also in The Times, we find the editorial board echoing my comments: They want the city and state to deliver funds for the MTA. Writes The Times:

Legislators, particularly those in Albany, bear an even greater responsibility to help after they rejected a congestion-pricing plan that would have brought the M.T.A. $500 million in additional funds annually. They spurned it anyway, leaving the M.T.A. to rattle a cup and riders to reach ever deeper into their pockets.

Mayor Michael Bloomberg, who championed congestion pricing, needs to move on and help transit in other ways. A sound businessman like the mayor knows that this city needs effective transit to do business, draw tourists and keep residents. Mass transit also reduces car traffic and tailpipe emissions.

Both New York 1 and the Daily News take a look at the hike proposal from the populist perspective. The News notes that straphangers already shoulder too much of the revenue burden for the MTA. NY1 reports that commuters are, unsurprisingly, not too happy with the prospects of another fare hike.

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.

Ah, December. Remember how enthusiastic and naïve we were when the MTA told us that along with the fare hike, New Yorkers would enjoy much-needed service upgrades as well? Those were the days.

Just three months after announcing that the service upgrades were to be postponed, the MTA has shelved them entirely due to dire financial circumstances. What an utterly unsurprising turn of events.

Pete Donohue reports:

The cash-strapped will not launch a $60 million service improvement package because it doesn’t have the money, the Daily News has learned.

The Metropolitan Transportation Authority last year unveiled plans that included more frequent bus, subway and commuter trains to soften the blow of fare hikes. The program was to be launched in phases starting this summer – if the authority could afford it.

It can’t, sources said.

“A final decision won’t be made on the enhancements until we report June revenue numbers next week, but revenues would have to turn around significantly as we are already $80 million behind in real estate taxes alone,” MTA spokesman Jeremy Soffin said.

On the one hand, I’m sympathetic to the MTA’s financial plight. The agency has long been screwed over by Albany with the congestion pricing debacle just the most recent in a long line of injustices. Its biggest source of dedicated revenue — real estate taxes — is at the mercy of the housing market, and the agency is trying to meet the demands of a 21st Century city without nearly enough money.

But on the other hand, the public was somewhat more accepting of this most recent fare hike because we were going to get more service. Under-served lines were supposed to see more trains and more frequent service, and now, straphangers will see nothing but another fare hike in 2009 with empty promises behind that one too. No one will be held accountable.

Meanwhile, all of these upgrades was supposed to cost, when first reported in December, $16 million this year and $46 million next year. Now, the MTA is saying that these upgrades would cost $30 million this year and $60 million next year. That’s a $16 million-per-year increase in the span of six months. The U.S. economy just isn’t that bad, and I’m not alone in nothing that these flexible numbers are rather perturbing.

Token chocolates, above, available at the Transit Museum store.