MTA reduces future fare hikes from 7.5% to 4%

The MTA has reduced the size of future The MTA has reduced the size of future planned fare hikes, including one in 2015, to 4 percent from 7.5 percent. Photo Credit: Ed Betz

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MTA commuters probably won't have to pay as large a fare increase as projected to ride a bus or train in 2015, transit officials said Wednesday.

The Metropolitan Transportation Authority, in response to calls from elected officials to hold down a planned 7.5 percent fare and toll increase in March 2015, said it had reduced by nearly half the size of the hike to 4 percent. Another planned rate hike in 2017 also would be 4 percent.

The smaller increase will cost the MTA $900 million in revenue over the next four years, according to MTA chief financial officer Robert Foran. The agency expects to recoup about $500 million of it by increasing its cost-cutting goals.

"These are aggressive. These are not easy to achieve," Foran said. "But that is what we're committed to do because we're trying very hard to keep these fare and toll increases as small as possible."

Although the MTA will look to achieve a 4 percent increase in fare revenue, the actual dollar increase for customers will vary, and specific increases won't be proposed until sometime next year.

In 2009, when the MTA was facing an unprecedented $1 billion deficit, the State Legislature approved a bailout package that called for the agency to raise fares by 7.5 percent every other year. The MTA's finances have since stabilized to the point that the agency projects small surpluses through 2016.

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In September, State Comptroller Thomas DiNapoli issued a report noting that the MTA expected $1.9 billion in unanticipated revenue and questioned why the agency had no plans to use the windfall to hold down fare hikes.

"The MTA's fare hike reduction is good news for commuters," DiNapoli said Wednesday in a statement. "In difficult economic times, any relief from rising fares and tolls will help ease the financial burden on New Yorkers."

In a Senate Transportation Committee hearing last month on MTA finances, chairman Sen. Charles Fuschillo Jr. (R-Merrick) floated the idea of the MTA adopting a 2 percent annual cap on fare increases, similar to that on school taxes in the state. The MTA's proposed 4 percent biannual fare hike works out to 2 percent a year.

Fuschillo said Wednesday the reduced increase is a "step in the right direction" but the MTA should work so future hikes "can further be reduced to zero."

MTA chairman Thomas Prendergast said several factors, including a desire to keep fare increases to the rate of inflation, went into the decision. Echoing the sentiments of other MTA board members, Prendergast said he realized fare and toll rates -- which have increased four times since 2008 -- were approaching a "breaking point."

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The New York City Independent Budget Office in July reported that MTA fares were on pace to climb by 50 percent during the next 10 years.

"The fares and the tolls have been getting to a point where our customers just can't afford to use the system anymore," said Andrew Saul, chairman of the MTA board finance committee.

The MTA will hold public hearings late next year before voting on a fare hike in December 2014. MTA officials noted the proposed 4 percent increase relies on other projections, including unions agreeing to a three-year freeze on labor costs. Unions so far have rejected the proposal.

"The bottom line is that this budget really stems on the fact that if things don't work out . . . it's labor's fault," said MTA board member Vincent Tessitore Jr., who represents LIRR unions. "All I ask is: Can we appreciate the hard work and dedication of MTA employees?"

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