MTA Floats Delay in Fare Hike Until 2022 on Weak Ridership
(Bloomberg) -- New York’s Metropolitan Transportation Authority may put off planned increases to subway, bus and commuter train fares this year as the largest public transit system in the U.S. struggles to increase ridership.
The MTA in January already delayed the planned 4% fare increase due to the pandemic. Now several board members, including Larry Schwartz, who chairs the agency’s finance committee, want to postpone such a hike until 2022 and look for additional revenue sources.
“I don’t think, at this time and place, raising fares on any New Yorkers is appropriate at a time when we need to encourage and increase ridership,” Schwartz said during a finance committee meeting on Monday. “Raising fares does the opposite. It’s going to be an encouragement not to increase ridership and possibly decrease it.”
The potential delay comes as the MTA is set to receive a combined $14.5 billion of federal aid to cover lost revenue after subway ridership fell by as much as 90% and is now still less than half of pre-pandemic levels. Increasing subway usage is critical for the MTA as it faces deficits as soon as 2024 if ridership fails to rise back to 2019 levels.
To implement a fare increase by November, MTA’s finance committee and its full board would need to approve it during scheduled meetings this week or in September. The MTA typically doesn’t meet in August.
“It’s important to let New Yorkers know whether you take the commuter rail or you ride a New York City bus or subway, to know that for the remainder of this year, you’re not going to see a fare increase,” Schwartz said during the meeting.
The MTA’s full board is set to meet on Wednesday. Schwartz and other board members want the MTA and local and state lawmakers to find new revenue sources beyond farebox receipts, such as a surcharge on Airbnb Inc. rentals or a gas tax.
The finance committee Monday approved a plan to raise $3.7 billion by borrowing against a portion of New York City sales-tax revenue that the transit agency receives.
The bonds would be the first backed by that revenue stream and help support its $51.5 billion capital plan and finance a new tolling initiative that will charge motorists driving into Manhattan’s central business district.
The MTA received $170 million of such sales-tax revenue in the state’s 2021 fiscal year, according to MTA board documents. That allocation will grow by 1% annually and generate $3.7 billion of bond proceeds, Pat McCoy, MTA’s director of finance, said during Monday’s meeting.
The MTA’s full board will likely vote on the financing mechanism at its September meeting and the agency may issue bonds or notes by the end of 2021, McCoy said.
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