Affordable Bus and Subway Fares Are Still Worth Fighting For

Photo: Infinite Jeff via Flickr creative commons

When the MTA introduced the 30-day unlimited-ride MetroCard in 1998, it cost $63. Today the cost of the 30-day pass is up to $112, a 77 percent increase. Over that time the base subway and bus fare doubled, from $1.25 to $2.50.

Meanwhile, wage growth has lagged. The average wage in the five boroughs increased only 54 percent from 1998 to 2012 (the latest year we have data). We know that most of these wage gains went to the city’s wealthiest earners, whereas wages for the middle class have stagnated or declined. For the vast majority of New Yorkers, a bigger chunk of their earnings is now needed to cover the cost of transportation (not to mention housing).

Despite these trends, former PlaNYC sustainability chief Rohit Aggarwala recently suggested in CityLab that riders would be better off covering a greater share of New York City Transit’s operating costs, arguing that poor transit service is rooted in a fare structure designed to lose money. Higher fares would mean more money for running the trains and buses, Aggarwala writes, which in turn would free up public funds to pay for capital projects, rather than operations.

As one of the chief architects of the PlaNYC initiative and the Bloomberg administration’s congestion pricing proposal, Aggarwala knows how vital an improved transit system is for the city’s future growth and sustainability. He estimates that if the subway fare went up to $5.80, the MTA would be able to borrow an extra $85 billion for capital projects.

This would pack a wallop, but Aggarwala questions whether all transit riders actually deserve to be subsidized: “The only reason to subsidize every transit rider, for every ride, is if you assume that the vast majority of riders do, in fact, deserve public subsidy.”

A higher fare is certainly one way to raise more money for transit, but framing the issue this way leaves out a much broader range of beneficiaries from a robust, reliable, and affordable transit system. Businesses benefit greatly from transit’s efficiency and the density of jobs and workers that the system allows. Property owners also benefit tremendously from the transit system. Land values and rents would be nowhere near as high as they are today without transit. Since businesses and real estate interests benefit from transit, they are among the biggest sources of tax support for transit.

State and local support for transit operations is a subsidy for riders in the way that public schools are a subsidy for families with school-age children. In both cases the public investment creates benefits for the society as a whole. I may not have kids in public school, but I’m better off living in a society in which every child receives a basic education.

Of course, Aggarwala is not suggesting that businesses and others should not contribute, but that their contributions should only be used for capital projects. Operations should pay for themselves and public dollars should go to capital projects. This is how it is done in Singapore and Tokyo. London is also moving toward this model. But this isn’t the only model. Transit in Paris is supported with substantial operating subsidies, as it is in New York.

In the case of the MTA, one reason a higher fare feels appealing to some transit supporters now is that major proposals to fund the agency’s capital program with road pricing have sputtered politically in recent years. Aggarwala, who saw congestion pricing die in Albany in 2008, is keenly aware of the government’s dismal record over the past few decades. “There is nothing in the record of the last half-century of subsidized U.S. transit that suggests long-term investments will ever be a priority,” he says.

In this light, the transit crisis in New York is not a financial problem — it’s a matter of priorities. And there is very recent evidence that the priorities of New York politicians will align with transit investment under the right circumstances. Five years ago, when the MTA was in the throes of an acute budget crisis, Albany approved the payroll mobility tax — raising more than a billion dollars annually for transit. Only a handful of state senators blocked tolling the East River and Harlem River bridges to cross-subsidize transit.

The politics of transit funding are not impossible in New York, and, as Aggarwala himself notes, the base of potential transit-supporting voters is growing. Instead of giving up on their institutions, giving up on the idea that our government can make a positive impact, these voters should demand that their elected representatives devote resources to support transit.

The alternative, to abandon the effort to make the state carry out its duties, is to give up on the democratic process.

  • bolwerk

    It’s not a penalty. The higher the toll, the fewer people who drive. The people who must drive come out ahead because they waste less time and less fuel. Besides, we already fund their roads through general taxation. Asking them to pay a toll on a crossing in exchange isn’t exactly overbearing.

    Here is what is a penalty: there is no way to take the subway from Queens to The Bronx.

  • StepUpAndSaySomething

    Although many jerks claim to help business in NYC (like subsidizing stadiums or tax breaks for the rich) few actually help business as much as the MTA. Moving such a tremendous amount of people through such a large city with such a low cost per ride is amazing. If you care about jobs, you should encourage greater funding of the MTA; almost every working person benefits from it, no matter how rich or poor they are.

  • lop

    How’d it work out the last time the city controlled it?

  • bolwerk

    This is not sarcasm: probably better than the last ~45 years. And that’s despite some periods real talent in charge, including Ronan and Ravitch.

    I don’t see how that’s an argument for who should control it one way or another though. Few people who post here were even born yet when the city last controlled it.

  • Michael Klatsky

    All the actual current system aside, the way we fund things is broken. Relying on money from motorists to fund transit is stupid and narrow minded. People take the mode that makes the most sense to them – the briefcase drivers will take transit to work if the transit was decent, but since it is currently funded on road money scraps, the transit network nationally and even in NYC is absolutely terrible.

    Consider that there is a reason we look at roadways in a per vehicle metric and not per persons moved – because motor vehicle fees are paid per vehicle to the TTF.

    And yes, while Bolwerk is correct that the TTF has been bailed out for the past decade, the system is designed to fund roadway construction and transit is a side thing. THAT needs to change.

    We need to be making planning desicions based upon person trips – then we will see the results we need. Such a system will not transfer money from drivers to transit, but rather funding will be directed at the mode that is most efficient based upon some bean counter at state DOT’s calculation.

  • bolwerk

    Using transportation money to pay for transportation hardly seems like a terrible thing to me. It’s not like motorists don’t benefit from a robust transit system. On any major NYC crossing, the opportunity cost of motorists is better transit. They use public funded space and resources that could be better utilized for transit.

    To say the highway transportation trust fund has been bailed out is an understatement. If it ever had a profitable year based on nothing but highway user fees, it wasn’t recently.

    And it’s not like transit users’ money isn’t ever redistributed to motorists either. How it happens is just different.

  • Michael Klatsky

    But it isn’t transportation money. It is specifically highway fund money.

  • lop

    >If it ever had a profitable year based on nothing but highway user fees, it wasn’t recently.

    In the 80s and 90s (probably before then too). The highway account spent marginally more money than it took in in gas taxes most years, but interest from previously accrued revenue brought it back to balance. If you add the billions siphoned off for transit and deficit reduction then road user fees were covering the federal portion of highway spending and then some.

  • bolwerk

    Highways aren’t transportation? Anyway, it’s not highway fund money in question and never was. Tolls on NYC bridges and tunnels are paid to the relevant MTA subsidiary, not the HTF.

    Mass transit funding is a local option anyway, and it seems like more is put back by various general fund transfers than is ever taken for mass transit.

  • bolwerk

    The oldest relatively complete data I could find was 1994. I’m too lazy/uninterested to parse it in any detail, but it appears that at that point the federal trust fund paid out a whopping 0.36% of its revenue to mass transit purposes* that year or $56 million out of over $16 billion.

    Meanwhile, the appropriation from general funds at all levels of government already exceeded $10B.

    * For comparison, as of 2010 (the newest relatively complete set), it paid out 3.92%.

  • lop

    ? In 10/01/1993-09/30/1995 10 cent tax per gallon went to the highway account, 1.5 cents went to mass transit, 0.1 went to leaking underground storage tank trust fund, 6.8 cents went to deficit reduction.

    So there was another 13 billion that year worth of road user fees diverted elsewhere, that’s what I was referring to.

    gas tax rates:

    http://www.fhwa.dot.gov/reports/fifahiwy/ffahappm.htm

  • bolwerk

    Oh, I see. I don’t know for sure, but I’d guess at the end of the day it’s just a convenient way to let state/local agencies have some mass transit money without cutting them a check.

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