The Metropolitan Transportation Authority is hearing calls to overhaul its fare system to attract riders and competing views abound on how to do it.
Through implementing long-awaited congestion pricing, the MTA may be able to raise up to $15 billion through new bonding based off the revenues from the tolls, officials say.
But ridership has been down significantly — as much as 90% during the height of the COVID-19 pandemic — and the system needs that revenue to support its five-year, $51.5 billion capital program.
Officials say no new fare increases are in store for 2021 to help pay for it. Overhauling the fare structure, though, would need state, city and transportation officials with disparate interests working together and shelving entrenched political tribalism.
“We need to come up with a completely new fare structure,” Larry Schwartz, the state-run MTA board’s finance chairman, told reporters after Monday’s committee hearings, the authority’s first in-person session in 17 months.
Schwartz, a former secretary to Gov. Andrew Cuomo and still a confidant to the governor who effectively controls the MTA, said the board, which makes the call on fares, would not raise subway or commuter fares this calendar year.
Last year the MTA shelved subway-and-bus fare hikes while raising tolls.
“There’s not going to be a fare hike, period, in 2021,” Schwartz said. “The way it works now doesn’t work. You don’t do biannual, across the board, 3% fare increases,” he said, referring to the MTA’s fare-hike practice the past decade.
Subway ridership remains less than half of its pre-pandemic levels and the MTA needs ridership revenue to support its five-year, $51.5 billion capital program.
MTA officials will propose their operating budget for 2022 and four-year financial plan on Wednesday. The authority operates on a calendar year.
Despite several rounds of federal aid last year, its February financial plan projected a cumulative cash shortfall of $8 billion through 2024, with a permanent wage freeze starting in 2022 and steep service cuts starting the following year.
Congestion pricing, which state lawmakers passed in 2019 as part of the budget, would be the first of its kind in the U.S., establishing tolling for Manhattan’s Central Business District, or south of 60th Street.
The MTA delayed its launch to 2023, citing federal delays on a necessary environmental review. Despite recent federal approval of an expedited environmental assessment, the authority has not updated its timeline.
On Monday, the finance committee approved a bond resolution to secure the city portion of sales taxes that legislature devoted to the Central Business District tolling lockbox.
Passage from the full board on Wednesday would send the measure to the state Capital Program Review Board, after which the MTA board would vote on final ratification.
This resolution could generate $3.7 billion of bonding, according to finance manager Patrick McCoy.
“What we’re introducing is a credit that will enable us to lever these tax receipts, one for one, to support 2020 to 2024 capital projects in the transit and commuter system,” McCoy said Monday.
“We’re very excited about being able to introduce this new credit.” After the expected final board ratification in September, “we could be in a position to issue bonds or notes by the end of the year for those [2020 to 2024] projects.”
The authority is one of the largest municipal issuers with $49.4 billion of debt including special credits.
The city’s congestion is the country’s worst by annual human hours of delay, according to a Texas A&M Institute
Mayor Bill de Blasio, initially lukewarm to the concept, pushed for it last week. The authority, though, has spoken with Connecticut officials sparingly and not at all with New Jersey’s Department of Transportation, despite a mandate from federal officials to engage with its Tri-State neighbors.
“Congestion pricing remains urgently needed and the MTA should expedite its implementation,” said Alex Armlovich, a senior research associate for the watchdog Citizens Budget Commission.
Fare revenue alternatives include an expansion of the “fair fares” program for lower-income persons and an MTA surcharge for Air BnB rentals.
“There are many, many ideas out there to generate revenue,” Schwartz said.
Board member David Jones, who along with Schwartz accused City Hall officials of ineffectively promoting fair fares, backed a recommendation by think tank Center for an Urban Future to include City University of New York students in the program.
“In many cases, [they] fall into the catchment area of not having a lot of money,” Jones said. “These are not rich people, either in the four-year or the two-year institution.
“I think there are a lot of ideas out there that don’t necessarily burden the MTA, but is a shared burden of a number of instrumentalities.”
In a nod to return-to-office variables, Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA, is urging Long Island and Metro-North commuter railroads to implement a pilot program of discounted 20-trip tickets with longer expiration dates, including during peak hours, to supplement or even replace traditional monthly tickets.
“Creative and flexible ticketing will better reflect the changing way we work and travel,” she said. “With fewer people commuting Monday to Friday — and with these patterns anticipated to continue into the coming years — adapting to address rider needs will help the railroads recover from pandemic-related economic losses."
According to Schwartz, the political climate is favorable to negotiate changes, especially with a new mayor coming in. Democrat and Brooklyn Borough President Eric Adams is the heavy favorite over Republican Curtis Sliwa in November,
“This is the perfect opportunity between now and the end of the year to work with all our elected officials at coming with a plan that generates the necessary revenue and not putting it on the backs on the people that need our mass transit system the most,” Schwartz said.
