New York’s Metropolitan Transportation Authority should increase its base fare to $2.50 from $2.25, Chairman Joseph Lhota told the board, as the agency looks to raise an additional $450 million in annual revenue.
In a letter to the board on Thursday, Lhota recommended preserving the bonus feature for those putting a minimum amount on their Metrocard fare tickets, but reducing the bonus to 5% from the current 7% while lowering the minimum purchase threshold to $5 from $10.
He also called for increasing unlimited-ride passes to $112 from $104 for 30 days and $30 from $29 for seven days.
He also urged the board to implement a $1 surcharge for new MetroCards. By encouraging refills, the system could save $20 million annually in production costs and cleanup, according to Lhota.
“These fare and toll increases are an essential part of the MTA’s financial plan,” Lhota said.
The full board will vote on the recommendations Wednesday, with the increases to take effect in March. The board’s committees, including finance, will meet on Monday.
Long Island Rail Road and Metro-North Railroad monthly commutation riders can expect to see fare increases of roughly 8% to 9% under Lhota’s complex plan.
Tolls on the MTA’s seven bridges that connect Manhattan with New York City’s outer boroughs would increase, but Lhota recommended enhancing the discount for Staten Island residents using the Verrazano-Narrows Bridge, which connects that borough with Brooklyn.
The agency has $32 billion of debt outstanding and plans for substantial capital borrowing over the next few years. Major projects include the Second Avenue subway line, the Fulton Street Transit Center and East Side access for LIRR trains.
MTA officials also estimated damage from Hurricane Sandy at $5 billion, with the authority on the hook for about $950 million even after insurance and Federal Emergency Management Agency reimbursements.
The MTA postponed until next week its scheduled $800 million sale of Triborough Bridge and Tunnel Authority general and subordinate refunding bonds, citing market conditions.
A one-day retail order will precede Tuesday’s institutional sale that features two series $266 million of general revenue senior refunding bonds and a downsized $545 million of subordinates.
Moody’s Investors Service assigned Aa3 to the senior bonds in that deal, while Fitch Ratings and Standard & Poor’s assigned equivalent AA-minus ratings and Kroll Bond Rating Agency rated them AA. Kroll rated the subordinate series AA-minus while Moody’s assigned its A1 rating and the other two agencies an equivalent A-plus rating.