Complaining about subway fare increases is one of the great New York traditions, right up there with actually riding the subway. But this year is special.

It’s not special because this fare increase proposal is particularly egregious. The two options put forward by the MTA will either keep the base fare at $2.75 but eliminate bonuses on unlimited MetroCards or raise the base fare to $3 but keep bonuses. The rub is the MTA is looking for about four percent more money.

No, this year is special because it comes during an actual subway State of Emergency, which the MTA is still technically in.

Recent improvements notwithstanding, subway service—and the LIRR and the buses—is the worst it’s been in decades. It’s not a great time to ask the riding public to fork over more dollars to the authority responsible for that.

But is the fare hike actually a good idea? No one likes to hear it, but fare hikes are a necessary evil for any transit system. Just ask the New York City subway, which had the same nickel fare for the first 44 years of its existence, a time span crossing one great depression and two world wars. The nickel fare was immensely popular with New Yorkers for obvious reasons. But that popularity is precisely what made it politically untenable to change for so long despite the various budgetary crises stemming from the obvious untenability of that arrangement.



(MTA)

Yes, the nickel fare is ancient history, but its legacy lives on every time a politician—such as, say Governor Cuomo or numerous city and state legislators—loudly proclaims opposition to a fare hike. They can do that because they have no control over the fare, which is set by the MTA board, an independent body.

In explaining the formation of the New York City Transit Authority In 1953, which was later folded into a new entity called the MTA, Hobart and William Smith College professor Clifton Hood wrote in his book 722 Miles, “At root, NYCTA was established because city leaders did not want to deal with the subways’ problems.”

During Tuesday night's public hearings on the proposed fare hikes, members of the public scolded and occasionally yelled at the 15 MTA officials and board members present. The MTA officials sat in silence and took it. It is their job, after all, to deal with the subway's problems. And as the very loud members of the public emphasized, there are a lot of them. Will fare hikes solve any of them?

The Case for Fare Hikes

The MTA is telling its board—who ultimately will be the ones deciding if there is or is not a fare hike—that the authority is in dire fiscal straits even with the planned fare hikes next year and in 2021. But matters would be even worse if they couldn’t do the fare hike, the MTA argues. If no fare and toll hikes are enacted, the MTA projects a $244 million budget shortfall next year, increasing in magnitude to a $1.6 billion shortfall in 2022, or $627 million more than if the hikes are enacted.

In other words, the MTA is arguing that fare and toll hikes are a necessary but insufficient measure to balancing the authority’s budget. If price hikes are not enacted—and get at least one more stream of revenue on top of that—the MTA threatens to consider service cuts.

Asked before Tuesday's meeting if there was any chance there won’t be a fare hike, acting MTA chairman Freddy Ferrer replied, “You mean barring the tooth fairy putting it under our pillows?”

Meanwhile, Governor Andrew Cuomo, who appoints the voting majority of board members and the MTA Chairman/CEO, has come out multiple times against the planned fare hikes, most recently on The Brian Lehrer Show, as a token of recognition that raising fares while the subway is still technically in a State of Emergency might not be the best look.

This is the legacy of the nickel fare: Cuomo can finger-wag about fare hikes all he wants to score political points while knowing full well the MTA board has little choice but to enact them.

Why does the board have little choice? First and foremost, their mandate is to safeguard the financial health of the MTA. Given that the MTA Chief Finance Officer just told them in bold-headlined presentation we have to do this or we will be in very serious financial trouble and nobody is giving them any realistic alternatives, their hands are in some ways tied.

If nothing else, this puts the MTA board in a tough but entirely predictable spot. As one board member once told me, “The board’s job is to take the hits.” They certainly did so on Tuesday night. Members of the board sat there, stoically, as irate riders lambasted them for presiding over a broken system and demanding more money for the privilege to use it.

The Case Against Fare Hikes

The argument against fare hikes, echoed by many of the public speakers on Tuesday, is simple: riders are being asked to pay more for service that has gotten worse. Further, the fare hike is not being presented as a way to make service better, but merely as a way to cover existing costs. Led by advocacy groups like Riders Alliance, which calls for state lawmakers to solve the MTA’s funding woes without charging riders more, their case essentially boils down to demanding the problem gets solved by other means. They don’t think it’s fair that riders themselves pay for the MTA’s mismanagement.

It’s not a bad argument! After all, the MTA is not exactly starving for cash. It expects $16.7 billion in income next year, which, at least in theory, sounds like enough to run a damn good transit system (for a point of comparison, the latest Transport for London budget is about $12.5 billion). And this doesn’t even include the five-year, $32.5 billion capital plan that encompasses major construction projects which in themselves have their own major cost issues.

The MTA’s budget problems stem from the expense column. Debt service will account for 16 percent of next year’s budget, payroll another 32 percent, and health/welfare 13 percent. Nobody is arguing for cutting workers’ health care or making anyone work for less than a solid wage, but even discussing improved efficiencies in health care, for example, seem to be completely off the table. And while the MTA board has created working groups to lower costs related to construction, the authority has yet to announce any real reforms on these fronts.

As a result, it’s hard to see how fare hikes serve as anything other than kicking the fiscal can down the road to ruin. If labor costs aren’t reformed, construction costs remain astronomically high, and the authority’s debt keeps ballooning, an extra few hundred million dollars a year in fares won’t change the bigger picture and we’ll be having this same conversation once again in two years.

So, until the MTA and state lawmakers show a good faith effort to fix the problem they have created, the argument goes, riders shouldn’t foot the bill.

So, What Will Happen?

A board created to facilitate for the raising of fares will probably raise the fares. Even deferring the fare hike by a year will cost the MTA some $300 million in expected revenue and forgoing it entirely will have cascading effects on the budget for years, since the next fare hike would result in less revenue, and the one after that, and so on. The MTA, in other words, is counting on this fare hike. It would be truly spectacular should the board vote against it.

However, because of the timing of this particular fare hike proposal, it’s at least possible the board will indeed vote against it, and it’s especially unclear what any new fare structure will actually look like.

There is one potential game-changer to this year’s fare hike discussion, though: Fair Fares, the city-funded initiative to offer half-priced unlimited MetroCards to low-income New Yorkers. The program will kick in before any possible fare hike and softens the blow for those New Yorkers who can least afford the increase. That’s something, at least, but it also slightly weakens the argument against the hike.

But even if the fare hike occurs, it won’t solve the trust gap between the MTA and the riding public. Few people believe the MTA will put the money to good use, which makes the public less willing to give the MTA more money.

It’s worth remembering that the London Tube system, which is far superior by almost any measure to the subway, has much higher fares. I suspect many New Yorkers would gladly pay Tube-like fares for Tube-like service, but very few New Yorkers, if any, have faith in the MTA to provide that service any time soon. Whether or not this fare increase, should it happen, perpetuates the cycle or helps start a new one is the only question that matters.

With additional reporting from Stephen Nessen.