New York's MTA Raises Subway, Commuter Rail Prices Amid State Budget Cuts

New York’s Metropolitan Transportation Authority raised monthly unlimited bus and subway fares and increased commuter rail ticket prices as part of plan to generate $400 million next year amid state funding cuts.

The MTA, whose 8.5 million weekday riders make it the busiest U.S. mass-transit system, increased the unlimited MetroCard price to $104 from $89 and the seven-day unlimited card to $29 from $27. Long Island Rail Road commuters will now pay from 5.5 percent to 11.5 percent more; those on Metro-North Railroad will pay an additional 3.8 percent to 14.3 percent.

The increases, the third in three years, will take effect Dec. 30, the agency said at a board meeting today. They are part of an initiative approved by the governor and Legislature last year aimed at raising revenue by 7.5 percent next year.

“You either raise the fare or cut service a whole lot more,” said Mark Page, New York City’s budget director. “A 7.5 percent increase represents the best compromise.”

The MTA’s $12 billion budget has suffered because a payroll tax in New York City and seven other counties adopted as part of a 2009 bailout hasn’t met projections. In January and February the state lowered its forecast for the subsidies by $336 million. The estimate was cut another $50 million by the MTA in July.

The state also eliminated more than $140 million in MTA aid to help close its own $9.2 billion budget gap, leaving the transit agency with a $900 million deficit.

‘Sad Day’

“Today is a sad day for the subway and bus system,” said Gene Russianoff, an attorney with the Straphangers Campaign, an advocate for transit-system users. “These cuts and this fare hike are happening not just because of the terrible economy, but because Washington, Albany and City Hall are not making transit the priority it should be.”

The $104 price for a 30-day unlimited MetroCard is 65 percent higher than when it was first introduced in 1998 at $63, Russianoff said. Transit riders are now shouldering 60 percent of the MTA’s operating cost, the highest burden in the nation.

The agency had considered putting a cap on passes that offer limitless riding. Jay Walder, the MTA’s chairman and chief executive officer, told board members this week that an “an overwhelming majority” commuters preferred an unlimited pass.

Service Cuts

The MTA has cut service, trimmed its workforce by 3,500 and reduced overtime. It raised fares for single rides on buses and subways to $2.25 from $2 last year. The single-ride fare will increase to $2.50 next year.

The steps will save the MTA $380 million this year and generate $500 million in recurring savings starting next year, the agency said.

‘I would certainly accept that some of these actions were painful for our customers and our employees,” Walder said at today’s meeting. “I think it’s very clear that the fare increase we’re discussing today would be much, much higher if we hadn’t undertaken these actions.”

Still, in a news conference after the vote, he said that federal, state and local officials had “let down” the MTA.

“We have seen funds cut for the MTA this year at a time when we had no choice but to make it up by cutting service and raising fares,” Walder said.

He said he would continue to push for more aid, including help to fill a $10 billion gap in the agency’s 2010-2014 capital plan. While some members urged the agency to cut back on mega- projects such as a new Second Avenue subway, Walder said the projects need to move forward with the help of more government aid.

‘Ticking Time Bomb’

Even with the fare increase, the MTA faces budget deficits of at least $1.3 billion over the next four years, as wages, health-care, pension and debt-service costs rise.

Wages and benefits account for two-thirds of the MTA’s operating expenses and will rise to $9 billion in 2014 from $8.1 billion next year. In August 2009, an arbitrator awarded MTA subway and bus workers an 11 percent raise over three years.

“The business plan of the MTA is a ticking time bomb,” said board member Andrew Saul. “We badly need to make structural changes here.”

The agency’s financial plan assumes that future wage increases will be offset by work-rule changes. The MTA is also working to reduce overtime, cutting $22 million this year and $60 million next year.

The MTA will vote on raising tolls on major bridges to as much as $7 from $5.50 later this month. The one-way toll for the Verrazano-Narrows Bridge between Staten Island and Brooklyn may rise to $14 from $11 for drivers paying cash.

To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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