N.Y. Times City Room: "Paterson Criticizes M.T.A.’s Plan to Raise Fares"

It seems Governor Paterson doesn't like fare increases:

HUDSON, N.Y. — Gov. David A. Paterson sternly criticized the Metropolitan Transportation Authority’s proposal to increase subway, bus and commuter rail fares and called on the authority to take a second look at its finances before it formally asks for an increase.

But here's the kicker:

However, Mr. Paterson did not say whether he would support the authority’s plea for more operating aid from the state.

Apparently he doesn't think the choo-choos, buses, etc. should be funded either.

Here's a question for Paterson: why aren't fares at least covering operating expenses, or at least the vast majority of operating expenses? According to the National Transit Database's Long Island Rail Road data (PDF), in 2006, a year of record ridership, the Long Island Rail Road only managed to cover 47% of its operating expenses with fares ($457,384,145). Meanwhile, the rail road paid out $861,314,374 in "salaries, wages, and benefits" out of its total operating budget ($975,310,538). If I understand these statistics correctly, dividing the fare revenues by the annual number of unlinked trips reveals an average fare might be around $4.60.

By comparison, New York's other major commuter rail road, Metro-North, managed to get 58% of its operating revenues paid for with fare receipts in 2006 (PDF).

Other articles are bemoaning the MTA's shortfall, such as this editorial in The Times ("Higher Fares, Worse Service, No Help," 2008-07-23):

The M.T.A. budget shortfall has ballooned from $200 million to $900 million in recent months, mainly because of the rising cost of fuel, falling tax revenues and debt servicing. The authority expects to raise some $200 million by raising fares. It has asked the state and city to contribute another $300 million to help narrow the gap.

NY1 speculates a little on the details ("MTA To Propose 2009 Fare Hike; Riders Outraged," 2008-07-22):

It's not clear yet exactly how much subway, bus, and rail fares would go up, but the MTA says it needs to increase total fare revenue by eight percent – the equivalent of about $400 million a year.

The details have not yet been worked out, but a 25-cent increase in the cash fare would be a 12.5-percent increase, in the neighborhood of the MTA's eight-percent target.

And don't help from the city, according to the NY1 article:

Both the mayor and the governor said Tuesday that the MTA should explore every other option before resulting to the hike.

"If we can cut five percent this year and two and a half percent last year, and we'll have to have further cuts, then the MTA's got to find ways to do that," said Mayor Michael Bloomberg.

"Not only don't we have money to contribute, we put in an enormous amount of money," continued Bloomberg. "For example, we pay debt service on a lot of the capital investments that have been made in the past in the MTA. And we provide police protection."

As for cutting bureaucratic tape, an article in The New York Daily News offers a little hope ("MTA boss says he'll appoint chief for each subway line to improve service," 2008-07-22):

Metropolitan Transportation Authority brass, confronting massive budget gaps that may lead to fare hikes, also said they anticipate savings by reorganizing and streamlining the underground bureaucracy.

NYC Transit - the MTA's bus and subway division - launched a pilot program to test the general managers' structure on the 7 and L lines in December.

"It's been very successful and we expect to expand it significantly," MTA CEO Elliot Sander said.

See also:

• MTA to Propose Another Fare and Toll Hike
  
• Rider reaction to MTA fare hike (Newsday)
  

Subway financing woes?

While the authority will end the current year with a $500 million surplus, it forecasts red ink for the foreseeable future and needs to find money now. It’s no mystery why Mr. Spitzer, at the end of a rocky first year and facing red ink of more than $4 billion, would want to put off the day of reckoning. It is puzzling, though, that he is holding off a promise of new transit money to 2010 — when he’ll be seeking re-election.

In the meantime, he should not be rejecting offers for help. The city comptroller, Bill Thompson, produced a study two months ago that found $728 million in potential revenue, more than enough to offset the need for immediate fare increases. And in Albany, scores of lawmakers have vowed to fight for extra money for transportation in the budget due before April 1.

If the increase is approved, the fare would not rise for the 14 percent of passengers who buy single-ride tickets. But the 86 percent who enjoy discounts will pay significantly more. New York passengers already bear more of mass transit’s costs than riders in other major cities. They should be squeezed harder only after every option has been tried.

- New York Times editorial "Express Track to a Fare Increase," 2007-12-13

What I'm disappointed about is I rarely ever see The New York Times attacking corruption at the MTA.

Hidden costs to the congestion charge?

NY1: "MTA Finds Hidden Costs In Mayor's Congestion Pricing Plan" (October 8)

MTA officials say Mayor Michael Bloomberg’s congestion pricing plan project would wind up costing hundreds of millions of dollars more than originally thought in transit service upgrades.

A commission created to evaluate the plan estimates the agency would need to spend more then three quarters of a billion dollars over the next five years. That money would go toward new buses, subways, and station renovations to accommodate the thousands of commuters, who are expected to take public transportation to avoid paying $8 to enter portions of Manhattan.

The MTA's concerns come as the agency is trying to raise support for a fare hike on trains, buses and subways.

The commission's recommendation on congestion pricing is due in January. The measure requires support from City Hall and Albany.

NY Times: "M.T.A. Says Mayor’s Plan to Ease Traffic Will Cost $767 Million to Accomplish" (Robert D. McFadden, October 8)

The Metropolitan Transportation Authority, in a report to a commission created to evaluate the mayor’s plan, estimated that expanded transit service and capital improvements for city and suburban riders who would give up their cars to get into Manhattan over the next five years would cost $767 million.

The total, the authority said, comprised $284 million in 2008 and 2009 for 367 new city and suburban buses, 46 new subway cars and many station renovations and service enhancements; $163 million for other subway and bus improvements from 2010 to 2012, and $320 million for two new bus terminals in Queens and Staten Island.

...

Citing congestion pricing projections provided by the city, the authority said 78,000 motorists in the city would shift to mass transit, while only 2,500 from the Mid-Hudson region served by Metro-North and 3,500 served by the Long Island Rail Road would take trains. It said it was premature to estimate how many of the 170,000 commuters who crossed bridges and tunnels each day would give up their cars.

I wonder why this comes as a surprise actually. We knew we'd have to upgrade service sooner or later. It just now happens to be sooner.

This puts NYC in an interesting dilemma though. Much of our rail transit actually runs at capacity, which means that adding more people to the services means overloading the system.

There is, however, the obvious fact that this "unfunded" spending will at least be made back. It's times like these when it's responsible for the City or State to take out debt.