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.