the-mta-fare-hikes-already-set-to-consume-much-of-obamas-stimulus-may-not-be-enough

The MTA: fare hikes, already set to consume much of Obama’s stimulus, may not be enough

As Albany seems to give up altogether over finding a new revenue source for the state-run Metropolitan Transportation Authority, the MTA released some numbers this morning showing that its budget situation is getting worse by the minute.

Through February, the MTA’s fare and toll revenues came in $5.1 million below expectations, or more than half a percent. Drop-offs at the Long Island Rail Road and Metro North, of nearly 2 percent apiece, are especially sobering. Subway ridership was a percent lower than expected, too.

These traffic drop-offs are terrible harbingers.

First, they’re more evidence of how job losses are hitting New York.

Second, they mean that the MTA’s 23 percent fare hikes may not be enough, as unbelievable as that may seem.

The MTA’s fare hikes depend on the idea that passenger traffic is fairly impervious to the higher fares — that is, that ridership won’t drop off significantly as fares and tolls go up.

But in this economy, customer behavior in response to any price increase is unpredictable. So is the level of future job losses in New York over the next year.

If more riders simply stop using transit, the massive fare hikes on which the MTA began to vote today will not be enough to overcome the authority’s $1.15 to $1.5 billion deficit for the upcoming year. (And no, lower traffic won’t help the MTA much in cutting costs, since its costs are largely fixed.)

Meanwhile, the gap that these huge fare hikes are supposed to cover continues to widen.

How? The MTA also said today that its real-estate related taxes, too, are falling off precipitously — more precipitously than it had expected.

The authority’s “mortgage recording tax” revenues for the year so far are 42 percent less than it had budgeted — significant because it had already budgeted for tremendous decreases here. Taxes on commercial property transactions in New York City are 67 percent lower than expected.

And the rate of drop-off is increasing. In March, the figures were 52 percent and 76 percent respectively.

These figures provide yet more evidence that Albany is being inexcusably negligent for not stepping in with some sort of solution for this crisis, including a sustainable new source of revenue and a sustainable fix for the authority’s fast-rising employee benefits costs.

No, there is nothing wrong with a small fare hike, along the lines of the 8 percent fare hike that the MTA would enact were it to get new money from Albany.

But playing around with 23 percent fare hikes is playing with the future of the city’s economy.

Obviously, the game gets more dangerous when fare hikes, inevitably, reach 30 percent or more.

Lastly, such massive fare hikes would go a long way toward undoing the local effect of the federal stimulus money that President Obama meant to go directly into people’s pockets.

Under the federal stimulus, the average person gets a $400 credit annually for the next two years — $33 a month.

But the MTA’s unlimited-ride card could go from $81 to $103 — taking back $22, or two-thirds, of that average stimulus.

Even with TransitChek and other programs that allow workers to pay for commutes with pre-tax dollars, the fare hikes still would consume half of the personal stimulus.

You may also like

New York’s Medicaid Spiral Is Worse Than Hochul Admitted

Although Governor Hochul said last week that the current trajectory of Medicaid spending is "not sustainable," the upward trend is even steeper than she and her budget director have acknowledged. Read More

NY’s Road To Electric School Buses Gets Bumpy

New York in 2022 told school districts they’d be barred from purchasing gasoline- or diesel-powered buses after 2027, and instead have to buy electric buses at more than double the upfront cost. “The purchase of new electric buses will help grow the market,” officials later pledged, “which will in turn help reduce prices.” Unfortunately for taxpayers, those reductions aren’t materializing—because state officials put the prices, and future increases, on cruise control. Read More

Hochul Shows a Jarring Lack of Direction on Health Care

Financing and regulating health care delivery is one of the biggest responsibilities of state government, yet Governor Hochul had remarkably little to say on that topic in her State of the State speech on Tuesday. Read More

Hochul’s Pushing Affordability. It Would Cost A Lot.

Governor Hochul is hammering an “affordability” theme in the leadup to Tuesday's 2025 State of the State address. But her campaign, dubbed "Money In Your Pockets," has so far featured little that would reduce the cost of providing, and therefore buying, goods or services in New York. Instead, the biggest announced and expected elements reflect Albany's waning interest in growing the state economy—and a greater appetite to redistribute what it produces. Read More

Unions Reprogram NYS To Do Less With More

Governor Hochul on Saturday signed an innocuous-sounding bill to “regulate the use of automated decision-making systems and artificial intelligence techniques by state agencies.” But the “Legislative Oversight of Automated Decision-making in Government,” or LOADinG Act, wasn’t about protecting New York from self-aware computers trying to wipe out humanity. Instead, it was an early Christmas present for the state's public employee unions—and a lump of coal for New Yorkers hoping for more efficient state government. Read More

Former Utility Regulator Warns State Lawmakers They’re On the Naughty List

A legislative hearing into spending by the state’s sprawling energy agency featured a surprise guest who offered sober warnings about Albany’s energy policy. Read More

New York’s Public Employee Shortage Is Over

Public employee unions complained loudly when New York's state government workforce shrank during the coronavirus pandemic, using that decrease as pretext to press Governor Hochul and state lawmakers for more hiring and costly giveaways to benefit their members. But the latest data show nearly every state agency has more employees than it did a year ago, and that by at least one key measure, the state workforce is larger than it was before COVID. Read More

Upstate Insurance Customers Pay the Price for Medicare’s Hospital Rate Hike

A billion-dollar Medicare windfall for upstate hospitals has turned into a crisis for upstate health insurers that's threatening to disrupt coverage for millions of New Yorkers. The Read More