Streetsblog New York City

Budget shortfalls exacerbated by the lingering recession have forced 84 percent of local transit agencies to hike fares, cut service, or begin considering one or both of those options since the beginning of 2009, according to a report released yesterday by the American Public Transportation Association (APTA).

APTA's bleak survey reflects data from 151 rail and bus systems throughout the nation, which together carry more than eight of every 10 U.S. transit riders. Sixty-nine percent of that group reported looming budget gaps for the coming fiscal year, with 11 agencies facing a deficit larger than 20 percent (see chart at right).

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.

Straphangers, are you ready to subsidize the runaway state budget?

The Post reports that higher transit fares could be in the cards for the third year in a row, as the MTA re-evaluates its options to cover a $750 million deficit.

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.

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.

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On Friday we noted that Assembly Member Richard Brodsky's latest anti-transit argument -- that "the actual cost of free and discounted student fares is close to zero" -- doesn't hold water. A letter from Brodsky addressed to MTA CEO Jay Walder calls for reinstating student MetroCards, laying blame for the program's potential elimination at the MTA's feet while neglecting to mention Albany's leading role in reducing funds for student transport. 

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.

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Without bold action from legislators to fund transit, middle-class New York families will have to spend $2,300 more per year to get around the city even as the quality of the service they're paying for declines, according to a new analysis released today by John Petro of the Drum Major Institute.

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.

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That's the implication buried in a roundup of dismal news from urban transit agencies that ran in Saturday's Wall Street Journal. After noting the overall ridership decreases tallied by APTA and the specter of punitive service cuts in many cities, the newspaper noted:

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.

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In a report released this morning, Transportation for America (T4A) expands on its months-long effort to map transit cutbacks across the nation and concludes that 10 of the largest 25 local agencies are being forced to hike fares by more than 13 percent.

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.

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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."

Here's another wake-up call for state legislators dithering over a transit funding package: The sinking economy continues to choke off revenues for New York City's subways and buses. The MTA finance committee announced this afternoon that the agency's budget gap is $621 million bigger than previously forecast. That's on top of the $1.2 billion hole that brought about the imminent doomsday fare hike and service cuts. The culprit? Plummeting revenue from dedicated taxes, fares, and tolls.

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.