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

82 Questions Hochul’s Pandemic Report Should Answer

This is the month when New Yorkers are due to finally receive an official report on the state's response to the Covid-19 pandemic, one of the deadliest disasters in state history. T Read More

The Real Lack of Courage Driving NYC Congestion Pricing

Governor Hochul is taking heat after postponing the state’s years-old plan to charge drivers to enter lower Manhattan. As critics slam her for lacking “political courage,” it’s an appropriate time to examine some of the underlying issues that congestion pricing was meant to indirectly mitigate—because many if not most advocates were afraid to touch those issues themselves. And if congestion pricing proponents are to be taken at their word about their concern for MTA finances, or traffic, or air quality, they must show some of the same courage they’ve accused the governor of lacking. Read More

To Encourage Recycling, Pols Move To Trash The Legislature

New York state lawmakers in recent years have surrendered some of their policymaking and taxing powers to the executive branch. With the 2024 legislative session coming to close, they’re poised to go even further and turn those powers over to an organization outside of government entirely. Read More

Lawmakers Seek To Revive a $10 Fee for Prescriptions That Was Dropped by DFS

A plan to require a $10.18 "dispensing fee" for filling drug prescriptions is back on the table in Albany – this time in the form of legislation rather than regulation. The Read More

Running Over Taxpayers: Legislature Speeding to Protect Cadillac Benefits for NYC Retirees

Bills designed to block any change to retiree health coverage for state and local public employees have been introduced repeatedly by legislators in both parties over the past 30 years. But the latest statewide “anti-diminution” measure, inspired by an ongoing controversy in New York City, would be the broadest and most costly yet—and more than two-thirds of state lawmakers are supporting it. Read More

How a Medicaid ‘Cut’ Could Lead to More Unionization of Home Care Aides

A money-saving maneuver in the newly enacted Medicaid budget could end up increasing costs in the long term – by paving the way for more unionization of the state's burgeoning home health workforce. Read More

Eight in 10 New York towns and cities have lost population since 2020

Filling in more details of New York's ongoing demographic decline, the Census Bureau has just released updated local population estimates showing that 80 percent of the state's towns and cities have lost residents since 2020. In addition to New York Ci Read More

Sales tax receipts are signaling slow growth in most of New York State

After rising sharply with an extra push from the inflation surge of 2022, sales tax receipts in New York grew much more slowly during the first four months of this year, according to from state Comptroller Thomas DiNapoli's office. Statewide sales tax Read More