The Port Authority has planned massive fare and toll hikes for the PATH and its bridges and tunnels, made worse by billions taken from the agency by Governors Christie and Cuomo. Photo: Terraplanner via Flickr.

Crossing the Hudson River will get much more expensive under a proposed Port Authority plan to sharply increase tolls and fares on its four bridges, two tunnels and the PATH train. The increases are a result of the poor economy, the costs of rebuilding after the attacks of September 11, and the expensive repairs needed on the agency’s aging infrastructure, said the Port Authority. Left unstated was the enormous cost of raids on the agency by the state governments of New York and New Jersey.

Under the Port Authority proposal, the cost to drive a car across a bridge or tunnel would increase by $4 this September, with another $2 increase in 2014. Tolls will increase the most on the costliest users. By 2014, the peak E-ZPass toll would be increased by 75 percent. Off-peak tolls would be doubled.

Truck tolls will nearly double during most times of day, reflecting the exponentially greater wear and tear inflicted by heavier vehicles. The Port Authority also hopes to disincentivize cash payments by tacking on a $3 surcharge, rising to $5 in 2014, for those who haven’t switched to E-ZPass.

PATH riders will also be forced to pay. The base fare will rise from $1.75 to $2.75; with discounts, the average fare will increase from $1.30 to $2.00 per trip. PATH riders will be spared from additional fare hikes in 2014.

To sell the toll package, which needs approval from both Governor Andrew Cuomo and Governor Chris Christie and is sure to be a heavy political lift, the Port Authority is broadcasting both its record of fiscal responsibility under popular but politically threatened executive director Chris Ward and the necessity of the projects the toll increases would fund.

The agency’s operating budget has been flat for three years, they said, while the capital budget has already been cut by $5 billion. That comes even as the costs of rebuilding at the World Trade Center have topped $11 billion and extra security requirements have added another $6 billion to the agency’s costs. The proposed toll increases, including those scheduled for 2014, would raise roughly $1 billion, according to the New York Times.

But Christie and Cuomo also bear responsibility for the Port Authority’s budget.

“Instead of finding new and steady revenue streams to pay for growing transportation infrastructure needs in each state, both Governors want to use the Port Authority as a piggy bank,” said Tri-State Transportation Campaign Executive Director Kate Slevin in a statement. “Governor Christie is relying on the Port to contribute $1.8 billion to pay for road and bridge projects that should be paid for by the state’s bankrupt transportation capital program… Governor Cuomo is banking on $380 million in Port Authority funds to help pay for the remaining three years (2012-2014) of the MTA’s capital program.”

Continued Slevin, “New Jersey has its hand in the Port Authority’s right pocket, and New York is ready to take from its left. The result is this proposal.”

That’s over $2 billion that the governors have already grabbed from the Port Authority. Because the Port Authority receives no state or local tax revenues, the $2 billion must be made up for in the toll and fare hikes.

Instead of looking like villains, however, Christie and Cuomo may be setting themselves up to look like heroes. According to the Wall Street Journal, the toll hikes proposed are much larger than what the Port Authority had been considering last year, perhaps so that the governors can ride in to the rescue and bring the toll hike down to a $2 increase.

Even so, many say that the toll increases are a necessity in order to pay for needed infrastructure. Billion dollar repairs are needed on the George Washington Bridge and the Lincoln Tunnel Helix, while major projects like raising the Bayonne Bridge to allow larger ships into Port Newark and building a bus garage adjacent to the Midtown bus terminal may also cost ten figures. Said Kathy Wylde of the business group the Partnership for New York City, “No one likes higher tolls, but without them, key infrastructure projects will come to an abrupt stop.”

In 1974, the Franklin Avenue Shuttle derailed, a not infrequent occurrence as deferred maintenance took its toll on the transit system. Photo: Doug Grotjahn via nycsubway.org.

Last week we wrote about how the looming $10 billion deficit in the MTA’s capital plan could lead to a $3.00 fare and $137 monthly pass within three years. That’s not the only way the transit authority could decide to respond to a lack of funding, however.

At the other end of the spectrum from fare-backed borrowing, the MTA could decide that it cannot take on any additional debt. In that scenario, the MTA would simply have to cancel or postpone every unfunded maintenance and expansion project — most of the next three years of the capital program. You can see those projects at the MTA’s capital dashboard, here. The result will be breakdowns, delays, and a slide back toward the decrepit and dangerous subway system of the late 1970s.

“You can expect to see the condition of the system decline pretty rapidly if you’re not doing this work,” said Felice Farber, the director of external affairs for the General Contractors Association of New York. “It’s not too hard to get back to the poor quality service of the past,” she said.

“You’ll have older buses, so they’ll be breaking down more often,” explained Pete Foley of TWU Local 100. “Subways will have to go slower,” as they pass over worn out tracks, he continued. “Eventually you’re going to have cracks. You’ll have derailments if you have a crack in the rail.”

Delays will be more common during rush hour as well, due to the lack of regular preventive maintenance. “You’ll be fixing things when they break,” said Foley. “They’ll wait until it’s an emergency.”

In the final three years of the capital plan, Farber said, 23 percent of the cost is network expansions like East Side Access, 27 percent are basic repairs to the system, 35 percent goes to regular replacement of tracks or buses, and thirteen percent to system improvements like new communications technology.

Expect to see more of this if the state doesn't fund the MTA capital plan. Buses and subways will start to break down pretty quickly without necessary repairs. Photo: Cory Doctorow via Flickr.

Over time, said Farber, putting this work off would force riders to pay more for less. “What happened on the New Haven line is the perfect example of what happens when you defer maintenance.” In 2000, then-governor John Rowland refused to buy new Metro-North cars. That decision ended up resulting in a ten percent service cut during rush hour this winter, when the repairs needed to the old cars overwhelmed the MTA. “They also paid huge overtime expenses while they struggled to get their system up to speed,” said Farber.

Both Farber and Foley noted that even though the capital program is currently funded, the transit system is already starting to struggle. “If you ride the train now, we’re already starting to see train delays because of signals, starting to see the doors have only one side open,” said Farber.

Foley pointed to scaled back plans for the MTA’s mega-projects. One of the two stations on the 7 line extension won’t be built, for example, and the corridors connecting the different subway lines at the Fulton Street Transit Center were narrowed by around six feet.

Station repairs and customer service improvements could be some of the first to go if the MTA’s capital plan deficit isn’t closed. “That’s the direct passenger experience,” said Farber. The current round of station repairs are mostly in Brooklyn and Queens, she said.

The expansion of real-time arrival signs to the lettered subway routes, the new subway intercoms, and security cameras also won’t go into effect, said Foley. “They’ll just have to cut these out.”

In reality, of course, the MTA can choose to mix and match between fare-backed debt and deferred maintenance, putting off the features that might be nice to have and charging riders for the ones they need to have. The MTA could also potentially swap in service cuts or layoffs for fare hikes.

The bottom line is that without the revenue that a solution like congestion pricing or bridge tolls could provide, none of the MTA’s options are good for riders. Should our transit system buy what it needs by taking out a huge loan and sticking transit riders with the bill? Or just let the system begin to fall apart? Albany shouldn’t be content with either.

If Albany doesn't do something about the $10 billion deficit in the MTA's capital program, MTA debt will pile even higher and transit riders will be forced to pay it off at the farebox. Image: NYS Comptroller

With each passing month, the MTA comes closer to the day of reckoning on its unfunded capital plan — the maintenance work that keeps trains and buses running and the expansion projects that provide more access to the system. While the first two years of the 2010-2014 capital budget were funded, there is a $10 billion deficit in the remaining three. So far, there doesn’t seem to be any plan from the city, state, or federal government to find this funding. In fact, between the State Senate’s goal of repealing the MTA payroll tax and the House GOP’s budget-slashing, there may be more obvious paths to the MTA losing revenue than gaining it.

Albany has twice passed up the chance to plug a major part of this gap by enacting bridge tolls or congestion pricing. Increasingly, it’s time to ask what happens to transit riders if legislators just don’t do anything. The options aren’t appealing: a $3.00 base fare or 1970s-style breakdowns and delays.

In one scenario, the MTA could decide that everything in the capital plan, from basic repairs to the system to megaprojects like the Second Avenue Subway, has to happen. In this case, they’d have to borrow the money to pay for the improvements up front. If the MTA borrowed all $10 billion, according to the state comptroller’s office [PDF], the MTA’s yearly debt service obligations would soar even higher than they are already projected to. In 2010, debt service cost the MTA $1.9 billion. If the capital plan is paid for by borrowing, by 2019 debt service would total $3.9 billion.

To pay for all that extra debt, the MTA would have to increase its yearly revenues the only way it can, by raising fares and tolls. According to Neysa Pranger of the Regional Plan Association, the MTA would need between $1 billion and $1.5 billion in new annual revenues to pay for $10 billion in bonds.

The 7.5 percent fare hike scheduled for 2013 — that’s on top of this year’s equivalently sized hike — is predicted to raise around $460 million a year, according to the comptroller’s report. Based on that number, it will take roughly a 24 percent fare hike to get $1 billion in new revenue and a 32.25 percent hike to reach $1.5 billion.

For riders, that’s a steep price to pay. If the fare hike is distributed evenly across different types of fares (for the latest hike, the base fare was held constant while the price of a monthly pass soared), that means a base fare between $2.80 and $3.00 and a monthly pass between $129 and $137.50 by 2014. If you think that people get mad about typical fare hikes, just wait.

For a single person buying a 30-day pass every month, that could add up to $400 more in transit costs each year. Families with children would be paying more than $1,000 more each year.

Another way to think about it is that this 24 percent fare hike would basically be in effect for 30 years, as straphangers gradually pay off this $10 billion loan. Over the 30-year lifetime of the bond, a single transit rider would spend an extra $12,000 to pay off just the next three years of unfunded capital projects.

The 2015-2019 capital program will need another revenue stream. Leaving that program unfunded would trigger a whole new cycle of borrowing and fare hikes.

In the end, the MTA is unlikely to put the entire cost of the capital program onto fare hikes. As Pranger pointed out, New York already puts more of the cost of its transit system onto riders than anywhere else in the country. “While it’s reasonable to ask riders to assume some of the costs of maintaining the system, the operating ratio needs to remain stable,” said Pranger.

In a follow-up post, we’ll look at the alternative to massive fare hikes: deferred maintenance, unreliable service, and the deterioration of the transit system.

Advocates with Transportation Alternatives' Rider Rebellion Campaign outside MTA HQ this morning. The Rider Rebellion aims to build a coalition that will pressure Albany to enact better transit policy. Photo: Noah Budnick

The monthly unlimited Metrocard will break the $100 barrier on January 1, following today’s 12-2 MTA Board vote to balance the agency’s budget by enacting a package of fare increases. (Get full details on the fare hike package from Ben Kabak.)

NY1′s John Mancini reports that the MTA Board faced some predictably withering public testimony this morning. But the real culprits weren’t even in the room — they’re at home or in their district offices while the state legislature is in recess.

With the bottom falling out of the MTA’s dedicated revenue streams three years ago, fare hikes and service cuts have sometimes felt like an unavoidable outcome of the recession, but it didn’t have to be this way. Would fares be rising at the same time that service is shrinking if Sheldon Silver and the Assembly had passed congestion pricing in 2008? Would this be happening if Pedro Espada and the fractious State Senate had allowed bridge tolls to be included in the 2009 MTA funding package? What if Albany hadn’t swiped more than $100 million in dedicated transit taxes from the MTA last December (a maneuver that legislators can repeat whenever they want)?

Looks like Board members are trying to get these same questions out there. Take a look at some highlights from the meeting, courtesy of the Twitter feed from Transportation Alternatives’ Noah Budnick, who’s building some awareness for TA’s Rider Rebellion campaign:

MTA board member Norman Seabrook, “Congestion pricing could’ve been the answer to the people of this city.”

MTA board member/transit rider rep Andrew Albert opposes the fare hike, calls for congestion pricing, E.River bridge tolls.

MTA board mbr Blair, “the riders have paid & paid…we need to ask those who have abdicated responsibility to step up.” Who?

MTA board mbr Michael Pally “Washington & Albany come & help us avert the fare hikes & service cuts.”

MTA brd mbr Susan Kuppferman “#Albany, we’ve done everything we can. We need your help” or else more hikes & cuts will come

In the absence of funds, transportation agencies are looking for cost-effective ways to move people. The Port Authority suggested it would be open to increasing Holland Tunnel capacity with a bus lane, for example. Photo: keithlam via Flickr.

The state’s top transportation officials delivered some tough news to the construction industry Friday: Public agencies are so cash-strapped they don’t even have enough money to maintain existing infrastructure.

With budgets battered by rising maintenance costs and recession-ravaged revenues, an industry-sponsored conference offered little prospect of further expansions to the state’s transportation system beyond the projects currently underway. Some combination of new revenue streams, cost-saving measures, and public-private partnerships will be necessary simply to keep New York moving, most suggested. Meanwhile, the cozy relationship between public officials and construction industry heavyweights was on full display, at times contradicting the general message of austerity.

Speaker after speaker laid out the costs involved just to maintain the state’s aging infrastructure. Joel Ettinger, the head of the New York City region’s metropolitan planning organization, said that over the next twenty-five years, “an amazing 98 percent of the money is going to go just to state of good repair and operations.” That’s a full $950 billion through 2035, he said.

Port Authority tunnels, bridges, and terminals director Victoria Cross Kelly presented her agency’s top capital project priorities, including billion dollar replacements of the Goethals Bridge, the George Washington Bridge suspender cables, and the New Jersey approach to the Lincoln Tunnel, as well as a number of smaller projects. “Each and every one of these has somewhere in their title ‘rehab’ or ‘replace,’” she said. “There’s no new added functionality.”

New York City Transit’s chief engineer, Fredrick Smith, pointed to the system’s dire need for new track signals. Currently, a quarter of the subway’s signals are over 70 years old. “How reliable do you think that is?” he asked. Unfortunately, the MTA capital plan for 2010-2014 is only funded through next year and the bulk of the signal work is theoretically scheduled for 2012.

Even for the basic tasks of keeping bridges up, roads paved, and transit running, current funding is inadequate. “Increased, stable resources need to be provided,” said acting NYS DOT director Stanley Gee. Gee singled out the project to rebuild the deteriorating Tappan Zee Bridge and add transit access across it as particularly problematic. “There’s no way that existing tolls can build that bridge,” he said.

As for where that money might come from, Gee was open to any possibility. “Pricing obviously is one,” he said. He also suggested a mileage tax to replace declining gas tax revenue. Gee isn’t counting on help from one potential savior, however: the federal government. “We don’t expect a long-term extension of federal funding any time soon.” Gee ultimately urged the audience, filled with politically powerful firms, to convince elected officials to fund transportation.

From a sustainability perspective, the upside of the funding scarcity is that many transportation agencies are looking to do more with less — and that can mean prioritizing transit. “We need to focus on making the best use of what lanes and tracks we have,” said Port Authority Director of Regional Development Andy Lynn. Calling the Lincoln Tunnel’s exclusive bus lane a great success story, Lynn said “We need more of that.” During the Holland Tunnel’s evening rush, he noted, buses make up less than three percent of the vehicles, but carry 48 percent of the people. There is currently no exclusive bus lane in the Holland Tunnel.

But cost saving measures won’t always favor transit riders. “If we can save money on our operating budget, that’s more money we can use for capital,” said Hilary Ring, director of government affairs at the MTA. The MTA’s goal is to reduce its operating budget by $750 million per year, he said, and the agency is well on its way to achieving it. Those savings don’t just come from administrative efficiencies but also unpopular layoffs. “It’s a very contentious situation that we need support for.”

Ring’s comment was a reminder of the constant conflict between operating budgets and capital investments, leading to tradeoffs between fares and service on the one hand and repairs and expansion on the other. The more debt the MTA takes on to pay for its capital program, the more its interest payments will rise and the greater the upward pressure on the fare will be. In one revealing moment that could only have played well before an audience of construction industry insiders, Ring dismissed popular anger over fare hikes, saying that “most people don’t really have a problem with the amount that they pay.”

The Tappan Zee Bridge is deteriorating rapidly and no one has decided how a new bridge will be paid for. Photo: joseph a via Flickr.

One potential way to relieve the pressure of tight budgets to give more control of the transportation system to business, through public-private partnerships. Such partnerships could speed up project times, cut the risk of cost overruns and add “incentives for innovation,” argued Samara Barend, an exec with engineering giant AECOM.

The idea already has a foothold in the New York region. The new Goethals Bridge will be built under a “design, build, finance, maintain” partnership, which importantly allows the Port Authority to retain control over toll rates, said the PA’s Cross Kelly. She also noted a public-private partnership in place to rebuild the George Washington Bridge bus terminal.

But Cross Kelly expressed skepticism about the way many public-private partnerships across the country have been structured. She suggested that the public sector should usually maintain control over tolls and explore shorter leases than the 49 or 99 year contracts signed in states like Illinois and Indiana.

Similarly, Lieutenant Governor Richard Ravitch sounded cool on private-sector control of transportation in his keynote address. “Every bus, every subway, every railroad line,” he said, “they were all privately owned and they all went broke.” Though he admitted that was partly because the government wouldn’t let the private operators raise fares, he implied that pricing essential public resources like transportation ought to remain a public prerogative. He also dismissed arguments about government inefficiency. “The Wall Street firms that push this and lobby for all of this very vigorously don’t innately have any better capacity to design or operate these systems,” said Ravitch.

One cost-saving device that didn’t get mentioned, of course, was getting tough with the contractors sponsoring the conference. Instead, the too-close-for-comfort relationship between public agencies and the industry was on full display. Describing the head of the General Contractors Association, NYS DOT Director of Civil Rights Warren Whitlock said that “her leadership on behalf of her industry is advancing our agenda,” as if there was no daylight between them.

The only elected politician to speak, State Senate President Malcolm Smith, did promise state support for transportation. But his remarks focused exclusively on high speed rail, not the urban transit systems and existing infrastructure that face catastrophic disinvestment, and which New Yorkers already count on to get around.

Touting his support for HSR, Smith promised that “there will be enough money spent that many of you who might be doing quite well will be doing a lot better” and that “there will be future millionaires and billionaires in this room.”

On the eve of today's primary election, most of the anger over the impending fare hike was directed at the MTA, not state legislators. Photo: Noah Kazis

More often than not, it was the transit agency who received the brunt of their anger, despite the abysmal performance of the state legislature and other elected officials when it comes to the last several years of transit policy.

At issue is a slate of fare and toll hikes. The most significant would raise the price of a 30-day transit pass from $89 for unlimited rides to either $104, a 17 percent jump, or to $99 with a 90-trip cap.

The hearing took place on the eve of New York’s primary elections, a time when the elected representatives who’ve forced the transit agency into its current position should have to reckon with the consequences. The state legislature has been slashing its general fund contributions to the MTA for years and last December raided more than $100 million in dedicated transit taxes from the authority. State pols rejected revenue streams that could fund transit — congestion pricing and bridge tolls — in 2008 and 2009.

Not one of the first thirty speakers, however, made the connection and suggested that transit riders employ their most powerful tool, the ballot, in today’s elections (though one did suggest voting in November). That said, the primaries had the much-appreciated side effect of sparing everyone the train of self-aggrandizing, MTA-bashing politicians who monopolized microphones during the previous round of MTA public hearings.

Staffers with Transportation Alternatives' Rider Rebellion campaign were handing out flyers describing the state legislature's responsibility in underfunding the MTA. Photo: Noah Kazis

The only pol who appeared in person was Manhattan Assembly Member Richard Gottfried. Perhaps surprisingly, Gottfried didn’t attack the transit authority. Insofar as he did criticize the MTA, it was for serving as his colleagues’ punching bag. “I urge the MTA to stand its ground,” he said, “and demand that the federal, state, and local governments make adequate funds available for public transit.” Claiming that the farebox makes up more of the MTA’s revenues than any other transit system in country, he argued that “riders are already overpaying.”

But in most cases, public testifiers took out their anger on the MTA.

“This is a board that is made up of bankers and real estate developers, trucking company executives,” accused Gavriel Gemma, an organizer with Take Back Our Transit System, a group affiliated with the TWU. “You don’t ride in the system. You ride in limousines and laugh at us.” (The state legislators who have far more control over the agency’s finances than the MTA board, it should be noted, are not known for riding in the system either.) Gemma proposed — and many speakers seconded — revoking the city’s lease of the subways to the MTA.

Velda Fuller accused MTA CEO Jay Walder of impoverishing New Yorkers through fare hikes and layoffs. “People will suffer in the winter and they will perish because of this situation,” she said.

Another speaker recited a four-verse ditty mocking Walder to the tune of “My Darling Clementine.”

Some speakers did train their guns on the state government, creating a palpable difference between last night’s hearing and those in March, in which anger was focused exclusively at the MTA. “This was brought on by former Governor Pataki and his henchpeople,” said David Kupferberg. “They should pay, not us.”

And in a few cases constructive ideas came to the surface. Susan Stetzer, the district manager of Manhattan CB 3, called on the state to step up with funding. Trudy Mason, a member of the NYC Transit Riders Council, specified that congestion pricing, bridge tolls, or a gas tax would be the best ways for the state to raise that revenue. Other speakers put in their two cents about how best to structure the fare hike, and a handful even gave thumbs up to the MTA proposal of adding a $1 surcharge each time riders purchase a new Metrocard.

The hearings continue on their tour of the downstate area through next week. The next will be tomorrow night in the Bronx.

Will legislators pledge not to steal dedicated transit revenues again?

All this is happening in an election year after the state legislature stole $143 million from the MTA and TWICE failed to put road pricing to a vote, passing up the chance to direct the revenue toward transit. With the primaries for State Senate and Assembly seats coming up in less than two months, now would be the appropriate time to hold legislators accountable for allowing this slow-motion train wreck to unfold.

A lot of attention will be focused on bridge toll obstructionist Pedro Espada's high-profile campaign to hold on to his Bronx State Senate seat. Espada is facing a group of challengers -- including one with backing from the Working Families Party -- in the September 14 primary, where the outcome of most New York City races is really decided.

Espada is far from the only elected official who owes transit riders some answers. Most other incumbents haven't become such magnets for public scorn, but hardly any of them can say they did all they could to prevent the fiscal catastrophe that transit advocates saw coming from a mile away. No one in the Senate or Assembly, after all, ever had to vote on congestion pricing or bridge tolls.

A glance at Gotham Gazette's indispensable candidate database reveals that some incumbents won't get to coast to the general election without facing any competition. Yes, the challengers may be longshots, and many aren't focusing on transit funding, but they're keeping the incumbents honest. Congestion pricing foes, like Denny Farrell in Upper Manhattan, and legislators who should have led on the issue but didn't, like Joan Millman in northwest Brooklyn, will have to defend their records.

With the public circus of fare hike proceedings about to ramp up, we're going to hear a lot of teeth-gnashing about the MTA (the WFP, whose party line many incumbents will be running on, is already on the case). But a lot more is riding on those primary elections than on the fare hike hearings. The next month and a half is no time to lose sight of that. It's our chance to get elected officials on the record about how they'll turn around the finances of our transit system.

Reports of the death of the M and R train in 2009 were greatly exaggerated, but tomorrow's aren't. Image: J Bary via Flickr.

Riders on the V and W, and the M6, M18, M27, M30, B23, B37, B39, B51, B71, B75, B77, Q74, Q75, Q79, Q89, Bx14, Bx25, Barretto Park Pool Shuttle, S60 and S67 buses will be taking new routes to work starting next week, but tomorrow, some will be seeing off their old commute in style. Street theater funerals are planned for both subway lines; details are here for those who want to attend. 

The dozens more routes where service will be less frequent or skip nights and weekends (all listed here) won't get such send-offs, but they do represent tens of thousands more New Yorkers who will find it harder to get to where they need to go.

Even so, the MTA budget remains unbalanced. Real estate tax revenues have come in $105 million short, Crain's reported yesterday. Plus there's another $144 million hole in the budget as of last week, when the agency agreed to continue providing students with free and discounted MetroCards without extra help from the city or state. Now other working-class transit riders have to bear that burden.

With revenues still in flux, it's too early to say whether tomorrow's transit funerals will be just the first, or if another round of service cuts is coming down the track. The MTA says it will look to close its deficit with buyouts and layoffs, a crackdown on overtime costs, and possibly a larger-than-expected fare increase, according to Crain's.

As always, remember: It didn't have to be this way.

Student straphangers got a reprieve today, but without a real commitment from Albany to shore up MTA finances, their victory comes at others' expense. Photo: New York Post

"Deal Saves Student Metrocards" proclaims the New York Times. "Ride on!" blares the Post. There's just one catch: There isn't really a deal.

Despite the sunny headlines trumpeting the likely end of this year's student straphanger saga, in reality Albany didn't give a dollar in new funding to transit, and while student MetroCards are safe for now, the money to fund them will come at the cost of another hundred million in service cuts, fare hikes, or both, for other transit riders. 

Here's the so-called deal, as first reported in the Post. New York State will contribute $25 million towards student transit, the city will chip in $45 million, and the MTA is on the hook for the remaining $144 million. The passage of the bus cam bill, it turns out, was another chit in the negotiation. Finally, the state permitted the MTA to raise its debt ceiling, allowing the agency's plans for construction and repair to move forward, funded by bonds on fares and tolls. 

Recall that Governor Paterson had already offered $25 million for student transit in January. Back then, such a measly sum was considered the first step in the elimination of student passes and spurred widespread protests. The city has been chipping in the same $45 million since 1995, the time of the original student MetroCard arrangement -- and with the total cost of the program steadily increasing, that equates to a smaller city contribution each year. Today's "deal" is the same offer that's been on the table for months.

What changed is that the MTA caved, accepting bus cams as a consolation prize. Cutting student MetroCards, the agency's strongest bargaining chip, was exposed as empty threat. The fight over student fares was a game of brinkmanship between Albany and the MTA, and the MTA blinked.

And if student MetroCards are preserved without a new dime from either the state or the city, the money can only come from one place: riders. That's another $144 million in service cuts, $144 million in increased fares, or some combination of the two.

For today, students scored a hard-fought win. But a real victory would have the state and city pick up more than a fraction of the cost of transit to school; after all, they pay the full tab for bloated school bus costs. A real victory would have the state stop stealing dedicated funds from the MTA (any bets on how much goes missing in the coming budget?).

But rather than actually investing in transit, the state and city have again simply shuffled the remaining scraps of public funding among different groups of riders.

The primaries are only four months away, and election season is starting to heat up in New York. All signs point to strong anti-incumbent sentiment among voters, with several entrenched legislators facing primary challenges. In Brooklyn's 27th State Senate district, long-time incumbent Carl Kruger is facing a primary challenge for the seat he's held since 1994.

Kruger is best known to Streetsblog readers for his role last year in gutting the Ravitch Plan and killing bridge tolls, which would have put the transit system on steadier financial footing. His opponent, Igor Oberman, has made support for public transit a centerpiece of his campaign.

Oberman, an administrative judge for the Taxi and Limousine Commission and Environmental Control Board, launched his campaign a few weeks ago after deciding that the powerful finance committee chair needed a serious opponent. "I don't think he represents the people inside the district or the Democratic Party," said Oberman. 

For the last few weeks, Oberman has been handing out literature [PDF] at busy subway stations across southern Brooklyn, criticizing Kruger and fellow Fare Hike Four members Ruben Diaz, Sr. and Pedro Espada for scuttling the plan to toll bridges over the Harlem and East Rivers, an act of obstructionism that set the stage for major service cuts and layoffs. Transit riders will feel more effects soon: The MTA's budget gap still exceeds $450 million.

At the Kings Highway station this morning, Oberman questioned whether his opponent can relate to constituents who depend on transit. "When's the last time he ever took the subway?" he asked, before flashing his very well-worn MetroCard. Oberman believes that "this is a commuter district" and that transit is "as important to them as police service or ambulances." 

Oberman supports bridge tolls, if the revenue is used to keep transit fares low and service strong. "We deserve a better transit system," he said. "We're trying to go green and compete as a major metro area."

Oberman also thinks that fighting for transit is a political winner, even if it means supporting bridge tolls. "Are bridge tolls popular in this district? No," he said. "But more popular than cutting student MetroCards." 

To get a sense for how Oberman's message is playing, I spoke to two commuters who took his literature. Andrew Delre, who was waiting for the Q train, said he believes that it's "definitely" important to be represented in the State Senate by another subway rider. What about bridge tolls? "Definitely not," he said. "It's just another tax for the people of New York City."

Another rider, who gave her name as Rachel, said she agreed in full with Oberman's platform. "I don't think they should raise the fares again," she said. "But people with cars should have to pay tolls too. I mean, it's only fair." 

Streetsblog has a message in with Senator Kruger's office to see how his transit platform stacks up against his challenger's.

(Chart: APTA)

The economic downturn has taken a particular toll on agencies' operating budgets, putting layoffs in the mix and prompting a schism within the industry over redirecting federal formula grants to cover transit operating costs.

Nearly one-half (49 percent) of every transit system surveyed by APTA has redirected capital funds, which are set aside for acquiring or upgrading equipment, to cover operating budget shortfalls. Another 18 percent of responding agencies said such a capital funding transfer was under consideration for the future.

“As bad as things are today, more drastic service cuts, fare increases, layoffs, and deferred capital projects will occur if this problem is not addressed,” APTA President William Millar said in a statement on the survey results, urging Congress to approve temporary federal operating aid beyond that already approved for the Obama administration's economic stimulus law.

By popular demand, here's an updated graphic depiction of how the state of New York stole dedicated transit tax revenue from the MTA in last year's deficit reduction package. The $190 million pot of money is known as the state's 18-B obligation to the MTA. The total MTA operating budget is nearly $12 billion (with a "b").

State lawmakers passed last year's MTA funding package promising that it was sufficient to stave off service cuts and avert fare hikes until 2011. But that package, which conspicuously lacked bridge tolls, turned out to be insufficient. And to top it off, Albany swiped more than $100 million in dedicated transit tax revenues from the MTA last fall to pay for the state's obligations.

Now, after facing the wrath of transit riders about potential cuts to subway and bus service, the MTA Board is weighing whether to raise fares ahead of schedule instead.

So let's just point out that the amount of money that Albany swiped from dedicated transit taxes last fall ($118 million) is greater than the cost of all the bus and subway service on the chopping block ($77.6 million). A fare hike would basically amount to Albany picking money from straphangers' pockets.

Hat tip @ShellySilver for the Post story.

The state and city spend about 58 times more per student on yellow school buses than what's on the table for student MetroCards. Image: manyhighways via Flickr.

A new round of MTA Board hearings gets started this week, and the biggest flashpoint is sure to be the student MetroCard program. New York City school children depend on free and reduced fares, especially since education reforms have led more students to attend schools farther from home. Yet the state has withdrawn funding for the program and the city has allowed its contribution to remain flat since 1995.

Predictably, when the MTA said it could no longer afford to provide student transport at a big discount, legislators like Westchester's Richard Brodsky were quick to deflect blame. Maybe they've never considered just how big a bargain they get by funding student fares.

Because the truth is, public spending on yellow school buses dwarfs what the state and city contribute to student MetroCards. School bus transportation is run by the city's Department of Education, which gets about 30 percent of its funding from the state. With a budget of a little more than $1 billion, the DOE's Office of Pupil Transportation moves around 140,000 students, according to a department rep. On average, that's more than $7,000 per student.

Then there's the MTA, which transports about 585,000 students through its free and discounted fare program. With City Hall's contribution to student MetroCards holding steady at $45 million and Albany offering to put in only $25 million, the city and state are collectively willing to spend less than $120 per student on transit to school.

The comparison is not quite apples-to-apples, since the two modes serve different populations of students. In particular, 40 percent of school bus transport serves special education students who receive door-to-door service. Even so, the disparity is enormous. The state and city spend 58 times more per pupil on yellow buses than they would spend under the current proposal to fund student MetroCards. Perhaps those politicians who consistently preface "MTA" with "wasteful and bloated" ought to find a new target.

Now contrast our current policy on student transport to Boston's. The Boston public school system pays $3.2 million out of the city budget for the 13,000 high schoolers who take transit to school. That comes to $250 per student, more than twice what New York City students receive from the state and city.

It's also a huge bargain compared to yellow buses. Boston pays $2,300 a head to transport kids on school buses. (About $74 million for 32,000 students, according to a BPS spokesperson.) Again, while it's not a perfect comparison, the difference is a factor of 10.

Where possible, it seems, a transit pass is far and away the best bang for your student transportation buck. So while the MTA likes to claim that it is New York's yellow school bus, that's only half true. The MTA is the yellow school bus that New York can afford. 

Brodsky's office sent us a copy of the letter [PDF], which is copied in full below. Among its 24 signatories, the overwhelming majority represent New York City:

Dear Hon. Walder,

We write to you as long-standing advocates for mass transit funding, as those who have regularly supported state funding for the MTA's capital and operating needs, and as those who represent students and parents across the MTA region.  We understand the continuing difficulties caused by the national recession, and the difficult decisions you are making as a consequence.  We believe that we share a desire to reform, expand, and improve the MTA, even as new leadership takes over, and as PARA 2009 makes real changes in legal, operational and fiduciary practices at the MTA. 

That being said, we write to make sure you understand the depth of our concern about MTA plans to end free and discounted student travel.  We cannot criticize any exercise that reviews all MTA expenditures and services in the face of the economic downturn.  But we reject any decision by the MTA to end free and discounted student travel as an element of a final package of changes. 

We reject that decision because it is not an accurate or intelligent analysis of the MTA's fisc [sic]. While the MTA asserts it needs $214 million in additional state and city aid to preserve the program, the actual cost of free and discounted student fares is close to zero.  We reject the MTA's assertion that the program must be valued at the ostensible lost revenue, and point out that state and city funding for the program actually exceeds the cost of providing the service. 

We reject that decision because it is a dangerous, unfair, and self-defeating political tactic. We understand the use of political tactics in budget controversies.  But there are limits, and the decision to put students and families out there as a pawn in the struggle to increase City and State funding crosses a line.

Simply stated, we ask that you immediately withdraw the threat to student fares, that you review the actual cost of the program across the MTA region, that you ensure that all students in the region be treated equally, and that you work with us to develop a fairer, clearer, and more successful negotiating strategy to get the MTA more money. For better of worse, this issue is becoming a defining moment for transit advocates in and out of the Legislature. In the spirit of fairness and cooperation, we ask for a timely response to this letter.

Best wishes,

Richard Brodsky

Michael Benedetto

Michael Benjamin

Jonathan Bing

James Brennan

Marcos Crespo

Jeffrey Dinowitz

Carl Heastie

Andrew Hevesi

Micah Kellner

Rory Lancman

Joseph Lentol

Margaret Markey

Grace Meng

Joan Millman

Audrey Pheffer

Peter Rivera

Linda Rosenthal

Michael Spano

Fred Thiele Jr.

Matthew Titone

Carmen Arroyo

Vivian Cook

Rhoda Jacobs

The only signatories who do not represent New York City districts are Brodsky and Spano, who represent Westchester, and Thiele, who represents Suffolk.

Without congestion pricing, fare hikes will hit New York's many transit-using families hard. Image: Ed Yourdon via Flickr.

The choice for policymakers, Petro writes, should be clear: Congestion pricing could raise $420 million in new annual revenue, enough to close most of the MTA's current budget deficit and spare working New Yorkers the brunt of painful fare hikes and service cuts.

DMI is a progressive think-tank based in New York City with an explicit focus on middle class issues. Today's report puts the economic and equity impacts of congestion pricing front and center. If the MTA tries to balance its budget with only service cuts and fare hikes, Petro estimates that a transit-dependent family of four will be forced to spend an additional $2,300 a year to get around the city.

Fully 55 percent of New Yorkers commute to work via transit. In contrast, only five percent commute into the CBD by car, and they are disproportionately affluent [PDF]. "One of the most frustrating arguments against congestion pricing is that it would disproportionately hit the middle class," said Petro. "It's frustrating because it's so plainly untrue." The DMI report makes a strong case for why congestion pricing is exactly the kind of policy that supports New York's middle class.

What's more, Petro argues, congestion pricing would be the most fiscally and environmentally responsible way to fund the MTA. Congestion pricing wouldn't force the MTA to raid its capital budget just to keep buses and trains running and would also take 100,000 cars off the road, improving bus service for millions and reducing both greenhouse gas emissions and asthma-causing air pollution.

The MTA needs to balance its budget, one way or the other. Congestion pricing offers a fiscally sustainable and socially equitable revenue stream with major environmental benefits. That said, Petro's numbers show that the MTA's $783 million deficit -- caused principally by declining revenues and shrinking government funding -- can't be closed solely with the $420 million that Mayor Bloomberg's 2007 congestion pricing plan was projected to raise per year.

The details of the plan could be tweaked, however. "Some form of congestion pricing could be created to raise enough revenue to close the gap, if that's what the goal is," Petro said. If Albany gets its act together, could congestion pricing be passed quickly enough to avert the current crisis? Petro believes it's possible, although to get the money in time for this budget cycle, he says the MTA will have to take out an expensive short-term loan.

That's a small price to pay when the alternative is to collect $2,300 more in fares from every transit-riding family of four in New York City. "If another source of revenue is not found, that is what we're looking at," said Petro.

The MTA's budget picture took another turn for the worse today. The payroll tax instituted as part of last year's funding package continues to raise far less revenue than expected. Which means that even if the extensive service cuts on the table take effect, the MTA will still have to deal with a $400 million deficit in 2010.

What's more, the MTA noted in a statement today that the payroll tax shortfall is probably a fact of life. The agency now projects revenue from the tax to come up $200 million short of what was predicted each year after 2010. In other words, the payroll tax just doesn't raise the money it was supposed to. And even that wasn't enough to shore up the MTA's finances in the first place.

The MTA must maintain a balanced budget, which leaves two options: increasing revenues or decreasing costs. The Daily News floats the possibility of fare hikes on top of next year's planned 7.5 percent increase, while noting that those fighting to overturn service cuts -- including the phasing out of student MetroCards -- now have a steeper hill to climb.

The current round of service cuts is painful enough. With transit funding absorbing body blows every few weeks, how long will riders have to wait before New York's elected leaders put more options on the table?

In yesterday's Huffington Post, John Petro of the Drum Major Institute laid out the stakes, arguing that congestion pricing "is the only option left to Albany and City Hall." Without it, Petro writes, "the cycle of short-term fix followed by financial crisis will continue, and there won't be much mass transit system to save anymore."

Riders of Chicago's El train, shown above, were spared fare hikes in 2010 thanks to a last-minute deal. (Photo: ~JudyCrawford via Flickr)

The cost of riding public transit rose at a 17.8% annual rate in the six months ended in November, the Bureau of Labor Statistics reported. Overall consumer prices were up at a 4.2% rate in the same period.

That statistic is a bit tricky, since it projects twelve-month inflation rates by looking at six months of data.

But it's still striking -- and scary -- to see transit fare inflation hitting levels that look as bad as price increases for health insurance, which in recent years has grown 8.7 percent faster than the annual inflation rate, according to the Kaiser Foundation.

Heading into 2010, it's easy to see urban transit agencies falling into a vicious cycle driven by state budget woes verging on the apocalyptic (see California), local resistance to fare increases that disproportionately affect non-car-owning commuters, and federal inaction on much-needed transportation reform.

If there's any upside to the grim picture, it may be that scarce funding is likely to force lawmakers into honestly apportioning scarce resources based on infrastructure projects' true value to local communities -- not the political popularity of ribbon-cutting ceremonies or promises of local job-creation that ultimately fail to materialize.

Such an outcome could well put transit and road projects on a more equal footing. But much like incremental emissions reductions taking shape at the state level, any change will surely take longer than most Americans would like. One thing that might help prod political leaders into action: more of a spotlight on the Journal's transit inflation number.

(Photo: T4A)

T4A's report illustrates the punishing effect of such cuts on transit riders, many of them low-income workers, with a set of well-trammeled statistics: demand hit a 50-year high in 2008; every dollar invested in transit produces an estimated $6 in economic growth; transit is far safer than car travel and provides greater public health benefits.

But when it comes to the political battle over remaking national transport priorities, T4A's transit cuts map -- viewable right here -- speaks loudest of all.

Transit fare increases and service reductions, T4A found, are concentrated in major cities and along the coasts. And as the current health care conflagration has shown, lawmakers rarely wield political power that's commensurate with the share of the population they represent.

As the Washington Post's Alec MacGillis catalogued in a commentary last week, Senate influence is particularly concentrated in the hands of small-state denizens such as Finance Committee Chairman Max Baucus (D) of Montana, who fought to remove a provision helping transit agencies with punitive tax shelters from last year's auto bailout bill.

Per MacGillis:

And then there's the Senate's age-old distortion of distributive politics, in which goodies are doled out on anything but a per-capita basis. California, Illinois, New York and New Jersey are among the 10 states that get the least back per tax dollar sent to Washington; Alaska, the Dakotas and West Virginia are among those that get the most.

In that context, it's not surprising that federal support for metro-area priorities such as transit is so perilously thin. Even in the House, where urban representatives lead several key committees, transit backers have yet to convince the Ways and Means panel to move forward with a solution to the immense revenue gap that has stalled progress on new long-term transport legislation.

A letter sent last month urging Ways and Means chairman Charles Rangel (D) -- who represents a transit-heavy district in New York City -- to press on with a transportation bill this year was signed by 15 of the committee's 26 Democrats. Yet metro-area members such as Rep. Pete Stark (D-CA), whose district is near Oakland, and Rep. John Lewis (D-GA) of Atlanta were absent.

And the legislation that T4A's report singled out as a concrete boost for transit agencies, Rep. Russ Carnahan's (D-MO) proposal to provide federal help with operating costs, does not count Rangel as one of its 60 co-sponsors. The bill also lacks a Senate counterpart, despite the presence of two transportation-minded Democrats in leadership positions (Banking Committee chairman Chris Dodd of Connecticut and Environment Committee chairman Barbara Boxer of California).

Of course, the political savvy of rural lawmakers does not automatically mean transportation reform must fall by the wayside; West Virginia Sen. Jay Rockefeller (D), chairman of the Commerce Committee, has taken the lead on a plan to set national performance targets for reductions in emissions and vehicle miles traveled.

Still, T4A's picture of cutbacks brilliantly illustrates where transit's congressional constituency should be leaping to its aid -- the question is what it would take to make that happen.

Yesterday's rally in Union Square drew hundreds of transit riders calling on the State Senate and Albany leaders to enact a long-term solution for the MTA's enormous funding shortfall. Judging by the cheering sections in the audience, most of the crowd was mobilized by the Facebook group "1,000,000 People Against the NYC MTA Fare Hike" and Transportation Alternatives. The Working Families Party, the event sponsor with the most political muscle, sent one representative but no speaker or even a display table for gathering signatures.

With state leaders sending signals that they're ready to accept another stopgap transit plan, the rally was an occasion to remind Malcolm Smith and company that the merits of transportation policy matter. "Albany has been missing in action for almost a decade," Elena Conte of COMMUTE told the crowd, calling out the Senate Majority Leader for making a junket to Puerto Rico in the midst of the MTA crisis. "Show up and do your job so the people of this city can get to theirs."

As Conte and other speakers emphasized, the New Yorkers who have the most to lose from doomsday fare hikes and service cuts are those who can least afford it. "Where I live, we're not talking inconvenience, we're talking survival," said Carl Van Putten, 76, a resident of Hunts Point, where the Bx4 bus line is slated for elimination.

Repeating a theme sounded by Mayor Bloomberg, teachers union head Randi Weingarten, and Kathy Wylde of the Partnership for NYC in a joint letter sent to Albany the same day, TA director Paul Steely White said it's time for the State Senate to buck up. "There is no politically expedient way out of this crisis," he said. "It's time our leaders started making the hard decisions needed to keep 8.5 million straphangers moving."

WFP director Dan Cantor (center) at a "Halt the Hike" rally last week. Photo: Working Families Party.

If there was any doubt before, now it should be clear: The latest transit rescue package proposed by Malcolm Smith is too skimpy to get the job done. By refusing to ask car commuters to shoulder any of the burden, the plan Smith put forward would merely postpone the day of reckoning for straphangers.

Tomorrow the State Senate is expected to vote on that plan, or some variation on it. For months obstructionist senators have excused their own inaction by pointing fingers at the MTA for what they deem a lack of transparency. But now the Senate might pass a transit funding package without holding any public hearings whatsoever. How opaque is that? The utter lack of transparency or discussion about this latest plan should be enough to preclude any votes from senators looking to burnish their good government cred.

The new budget numbers also set the stage for tomorrow's big rally in Union Square, where the Working Families Party and transportation advocates will gather to protest the doomsday fare hike and service cuts. The Senate's proposal is a band-aid that won't deliver what this coalition demands: a long-term, sustainable revenue stream that will protect straphangers from paying more for a deteriorating transit system. A real remedy, like the Ravitch plan, needs a united front behind it in order to regain momentum. This rally must be a galvanizing moment, and the person best positioned to deliver is Dan Cantor, head of the labor-backed Working Families Party.

Here's a chance for the Working Families Party to make a strong push for a robust transit plan. A plan that will put the city's subway and bus systems on sound footing. A plan that will spare working New Yorkers from worse fare hikes and deteriorating service.

Car commuters are one constituency asked to sacrifice next to nothing in the Senate's latest proposal, even though the average income of the city's car owners more than doubles that of the transit-riding, car-free majority. The official position of the Working Families Party is that the MTA funding plan should be "based on the Ravitch principles." Coming out with a more forceful position at tomorrow's rally -- like a full-fledged endorsement of the Ravitch plan itself, including bridge tolls -- could change the terms of the debate.