Support is building among MTA board members for reconsideration of planned fare increases in 2019 and 2021, even though the agency faces new financial pressures to pay for an expensive overhaul of the ailing subway system.
Metropolitan Transportation Authority board member Mitchell Pally, who represents Suffolk County, is pushing the agency to abandon its current schedule of fare increases every other year — which would include a 4 percent raise to be voted on about a year from now.
Saying that the monthly MTA commuting costs, which can top $500 for some Long Islanders, have reached a tipping point, Pally is urging the agency and its funding partners to remove the financial burden from customers and come up with a more sustainable plan to balance its budget.
The MTA’s Nassau representative, John Molloy, echoed Pally’s call, saying “it’s time for that kind of change,” but added that the funding to make up for the lost revenue has “got to come from somewhere.”
Other board members interviewed stopped short of endorsing Pally’s proposal, but agreed some commuters are being stretched to their limit.
“There’s only so much that our fare-payers can continue to pay to make the system function the way it’s supposed to function,” said board member Scott Rechler, who was appointed by Gov. Andrew M. Cuomo.
Lawrence Schwartz, another Cuomo appointee, said while it’s “premature to draw a line in the sand,” he agrees the MTA should reconsider its fare structure before its next increase. “I don’t think raising fares every two years is necessarily the right approach,” Schwartz said.
Neal Zuckerman, who represents Putnam County, similarly said he would not “go as far as to say that riders should bear nothing more.” However, he praised Pally for “raising the really important question of who is going to pay.”
And board member Veronica Vanterpool — once a proponent of regularly scheduled fare increases — said that although she could not commit to voting against the upcoming fare increases, “the riders of the systems are really the only ones that consistently uphold their responsibility” to fund the MTA.
“Riders don’t have a mechanism to say, ‘Sorry, we’re going to cut our contribution,’ but the city and the state do,” said Vanterpool, an appointee of Mayor Bill de Blasio. “And that’s a problem.”
Even MTA chairman Joseph Lhota, chosen in June by Cuomo to run the authority, has suggested he’s open to reconsidering the increases. Last month, he said that while “no decision has been made one way or the other” on fare increases, he understood Pally’s viewpoint “and, in many ways, I’m sympathetic.”
“My job is, statutorily, to balance the budget of the MTA. I’ll have to do what’s necessary,” Lhota told reporters after the MTA board’s November meeting. “Right now . . . we’re looking at a less-than-inflation fare and toll increase in 2019 overall. But if the revenues come in sooner than later and we can not have the increase, that would be a good thing.”
The next fare increase — the seventh since 2008 — is set to be voted on late next year by the full MTA board, which includes members representing the various regions in the MTA’s service area. Cuomo controls six of the board’s 14 votes.
The talk of rethinking a key revenue stream for the MTA, which stands to make about $300 million annually from another fare increase, comes as the agency scrambles to pay for several new financial obligations — chief among them the recently proposed NYC Subway Action Plan. It calls for $800 million in improvements in the short term, including faster responses to service problems and changes in maintenance practices — and $8 billion in long-term capital investments. It also comes as transit ridership, which had boomed in recent years, has begun flattening out.
State Comptroller Thomas DiNapoli, in a recent report, speculated that the rate of spending might force the MTA to raise fares even faster than planned. Lhota rejected the notion and accused DiNapoli of “fear mongering.”
The Citizens Budget Commission, a nonprofit financial watchdog group, in a report last week, predicted that even with the planned fare increases, the MTA stands to post budget deficits in the hundreds of millions of dollars in the next several years without a new revenue stream to fund the subway plan.
“Without that funding — that as-of-yet-to-be-identified funding source — they will run a cash deficit next year,” Jamison Dague, the commission’s director of infrastructure studies, said last week. “And in an environment where that’s the case, in an environment where the MTA has revised its own revenue estimates downward significantly over the last year, I’m not sure there’s a lot of wiggle room to forgo a fare increase.”
Not going forward with the next round of increases would reverse a policy, adopted by former Gov. David Paterson’s administration in 2009, to raise fares by a set amount every other year.
Pally and others argue that a lot has changed since 2009, when the recession caused the MTA to scramble to fill a budget hole of more than $1 billion. With help from the extra fare revenue, the creation of the state’s Payroll Mobility Tax, and internal cost-cutting, the authority’s finances steadily improved over the years, and it expects to close out 2017 with an $80 million budget surplus.
At the same time, deteriorating service, including on the LIRR, which experienced its worst on-time performance in 17 years through the first half of 2017, has made another fare boost less palatable than at any time in recent history, some experts said.
“The 2009 agreement was done at a much different time, and I think it has to be reconsidered now . . . It may have been an appropriate response at that time, but it’s not an appropriate response at this time,” said Pally, who has argued that the fare increases tend to be especially onerous for Suffolk residents, whose LIRR fares are calculated by distance traveled.
Ten years ago, a monthly ticket from Ronkonkoma to Penn Station cost $267. Today it costs $391 — an increase of 46 percent. A 30-day unlimited ride MetroCard costs another $121.
“There’s a lot of recognition that people are being pushed pretty much to the end of what they can afford,” said William Henderson, executive director of the MTA’s Permanent Citizens Advisory Committee, which includes the LIRR Commuter Council. “I think everyone would like to forgo a fare increase. The question: Where does the money to replace it come from?”
That question is expected to be a central focus of city and state lawmakers in the new year. Some have pushed for “value capture” plans that would allow the MTA to better share in the financial success of real estate developments near transit stations. De Blasio has proposed a tax on city residents making more than $500,000 a year to help fund the transit system.
One solution gaining traction is the latest incarnation of congestion pricing — a proposal that failed when it was last pushed by former New York City Mayor Michael Bloomberg nearly a decade ago.
In August, Cuomo proclaimed that “congestion pricing is an idea whose time has come” and empaneled a task force to consider the option. One proposal is transportation guru “Gridlock Sam” Schwartz’s Move NY plan, which would add tolls to now-free East River bridges and at 60th Street in Manhattan, while reducing tolls at lesser-used crossings.
A Cuomo spokesman referred a request for comment to the MTA.
Although the plan has been mainly promoted by New York City Democrats, among the co-sponsors is Assemb. Fred Thiele (I-Sag Harbor), who said the plan was more “fair” than solely funding the MTA with tax dollars and fares.
“I certainly think it’s something that is more politically viable now than it was however many years ago,” said Thiele, adding that the new revenue would not necessarily be a substitute for another fare increase. “To me, all options are on the table. But I certainly don’t want to see Long Island, and particularly eastern Long Island, treated unfairly.”
Pally said he’d like to see a congestion pricing plan adopted, but even if it isn’t, the MTA should stop looking to its customers for more money.
MTA fares account for a little more than half of its operating revenues — among the highest percentages of any transit agency in the United States, according to federal statistics.
“I think this is the best time to have this conversation,” Pally said. “Everybody cares at the moment. It’s not just the railroad riders.”
Board member James Vitiello, who represents Dutchess County, said that while he shares Pally’s empathy for riders, he does not believe the MTA can afford to give up the fare increases — a move he said would set a “dangerous precedent” as the MTA wrestles with nearly $50 billion in debt and unfunded pension liabilities.
“Because the fare does not nearly cover the cost of delivering the service, if you leave it flat you’re just asking the public to give you the money elsewhere,” said Vitiello, who believes that, even if the agency does find a new revenue stream, it would likely still need the anticipated fare increase. “We just don’t have the wherewithal to forgo budgeted increases.”
Fare increases over the years
2008: 4 percent
2009: 10 percent
2011: 7.5 percent
2013: 7 percent
2015: 4 percent
2017: 4 percent
2019: 4 percent
2021: 4 percent
LIRR monthly ticket fares over the years
(includes Mineola, Valley Stream, Great Neck)
(includes Long Beach, Massapequa, Hicksville)
(includes Babylon, Deer Park, Huntington)
(includes Islip, Ronkonkoma, Port Jefferson)
(includes Bellport, Speonk and Yaphank)
(includes Greenport, Southampton and Montauk)
Sources: MTA, LIRR