Which Fare is Fair? Issue Confronts N.Y. MTA Board

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A faction within the board of directors of New York’s Metropolitan Transportation Authority is calling for reduced fare for lower-income riders.

The group, primarily new appointees of Mayor Bill de Blasio, is speaking out along with some transit advocates as the authority enters another round of biennial fare and toll increases, pegged at roughly 4% over two years.

The MTA is one of the largest municipal issuers with roughly $38 billion in debt. Chief financial officer Robert Foran said at the Nov. 16 board meeting that failure to enact the increases and to meet savings targets of at least $1.6 billion annually would make the authority’s financial situation “untenable.”

“From a bondholder perspective, I like regular, predictable increases,” said Howard Cure, director of municipal bond research for Evercore Wealth Management.

Foran told the board that the authority projects a $319 million deficit in 2020.

A new government in Washington, an unsettled transit union contract and questions about the Second Avenue subway opening all create uncertainty for the authority, which maintains of one of the nation’s oldest transit systems.

“I don’t want to say it’s bubbling up, but it’s coming to the surface,” MTA Chairman Thomas Prendergast said of so-called social fares. “One could make an argument as to whether or not we’re getting two dichotomies in the population in terms of low income and higher income.”

According to Fredericka Cuenca, the MTA’s director of corporate initiatives, proposals from “various constituencies” have ranged from half-fare for low income students, subsidized fare for college students, a suburban weekend ticket and a “freedom” ticket.

The latter, which the New York City Transit Riders Council has proposed, would expand on the MTA’s City Ticket discount program and enable customers to ride an authority bus, subway, or commuter rail for a reduced rate within a given zone. The Transit Riders Council has suggested southeastern Queens, long considered a transportation desert, as a starting point.

The constituencies include a new, social-agenda minded de Blasio bloc on the board featuring city transportation Commissioner Polly Trottenberg, community activist David Jones and Veronica Vanterpool, executive director of the nonprofit Tri-State Transportation Campaign.

Jones, citing MTA data, said 64% of low-income riders are confined to the bonus, base and cash-fare structure. According to Jones, many of them cannot afford weekly or monthly passes. “$116 for a 30-day pass is beyond the means of many who are low income,” he said. “It seems that we are tilting again.”

Prendergast said fare structures involve a balance of policy, service and fiduciary responsibility.

“I think those are valid data points,” he said.

The MTA, though, is a state-run agency with Gov. Andrew Cuomo at the throttle. And the relationship between Cuomo and de Blasio has been fractious.

“The governor still controls the board more than the mayor,” Cure said. “Like a lot of political things in the city, if the mayor wants it and the governor doesn’t, it won’t pass.”

Under certain conditions, reduced-fare MetroCards would make sense for people who earn less than a certain amount as long as they work at a paying job, said infrastructure expert Nicole Gelinas.

“Supporting transit to work supports work, and it also makes fare hikes easier, as they hit the poor less if the poor are protected from them by having to pay, say, only half the cost of a MetroCard,” said Gelinas, a senior fellow at the Manhattan Institute for Policy Research.

The MTA, she added, should only do it if the state and city have committed for it indefinitely, and both should budget out of social services, not transit.

“Moreover, the state and city shouldn't make such a move until they've identified how to fund the MTA's capital budget.”

The MTA wrestled with state and city officials for 18 months before all parties last spring agreed on a $29 million, five-year capital plan.

“The biggest issue with the MTA is the capital program,” said Cure. “They have a $29 billion capital program to which the state and city have committed $10.8 billion. Yet to date they have come up with only $1.6 billion. That’s much more important for the MTA.”

Open questions for the MTA range from the effect of new Republican leadership in Washington to contract talks with Transport Workers Union Local 100, which represents subway and bus workers. The MTA has baked a 2% increase in labor costs into its proposed $15.8 million operating budget for calendar 2017, which its board will consider in mid-December. Debt service accounts for $2.6 million, or roughly 17% of the budget.

Farebox and toll revenue account for just over half of the MTA’s annual revenue.

Transit advocates are scrutinizing President-elect Donald Trump. While he represents a party traditionally reluctant to fund mass transit, New Yorker Trump has advocated spending up to $1 trillion for infrastructure improvements.

“At the federal level you worry a little bit about more of an emphasis on roads than mass transportation because mass transit is not the basis of their support,” said Cure. “That could put more pressure on the MTA’s capital program and on the city’s budget. Obviously the MTA is vitally important to the economy of the region, but it is expensive.”

In addition, the authority is scrambling, at Cuomo’s insistence, to open the Second Avenue subway line by year’s end. The megaproject is intended to alleviate crowding on the north-south Lexington Avenue corridor along Manhattan's East Side. An independent engineer on Nov. 14 said the MTA needed “a significant effort” to complete tests such as fire alarms, elevators and escalators to open the system.

According to Prendergast, the issue of social fare gained prominence in the Pacific Northwest while he was chief executive of Vancouver, British Columbia, transit system TransLink.

“You’ve got systems in Portland and Seattle that are trying to deal with that issue as well as San Francisco,” he said.

He said that while in Vancouver, he experienced an “a-ha” moment when a board member who was an elected official – and sensitive to social fare – rode the system extensively and reported his findings.

“He said we shouldn’t base the fare policy in toto across the entire economic spectrum and cut back how much we charge. He said we should figure out ways to subsidize people at the lower end of the spectrum,” Prendergast said. “That is a social issue that every transit system in the United States is addressing to various degrees. It’s one of the real issues we deal with as a board.”

Budgetary squeeze and the system’s age also inhibit the authority from more innovative measures such as safety doors on subway platforms.

A spate of recent shoves, jumps and falls, including a pushing fatality Nov. 7 at a Times Square station, and chronic overcrowding has prompted some calls to install screen doors on platforms.

“This can’t go on,” said board member Charles Moerdler, who has lobbied frequently for their installation and has said that advertising could help pay for them.

Jones requested MTA officials to study cost, timetables and priority stations. The MTA, meanwhile, is considering a pilot program for such doors at Times Square.

“Platform doors that are in systems where they are designed from day one with them in place, which is in the majority of systems that have them, is one thing,” Prendergast told reporters after the Nov. 16 board meeting. “To put them in a system in a retrofit way, there are considerable technological challenges, putting aside the cost issue. The cost issue is substantial, too.”

South Korean capital Seoul retrofitted platform doors on old stations about five years ago, paying at least partly with ad revenue.

Prendergast recalled a visit from Seoul officials when he was New York City Transit president.

“They came here, but they were looking more from the standpoint of them choosing the stations. If you choose the stations from the standpoint of maximizing revenue, you don’t necessarily have the benefit you want for the entire line.”

London and Paris installed platform doors, though on newer lines.

“London did it on half the Jubilee line,” said Prendergast. “When Paris did it, it was on the new line, line 14, the Météor line. No legacy systems: Boston, Philadelphia, Chicago, they’re not doing it. There are significant challenges to it.”

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