One learns a great deal from reading past history. To understand why fare increases are periodically required for the New York Metropolitan Transportation Authority (MTA) New York City Transit subway system, go back to the beginning.
The original BMT (Brooklyn Manhattan Rapid Transit -- today's B,D,J,M, N,Q, R and Z lines) and IRT (Interboro Rapid Transit -- 1,2,3,4,5,6,7, Franklin Ave and Times Square shuttles) subway systems were constructed and managed by the private sector with no government operating subsidies. Financial viability was 100 percent dependent upon farebox revenues. They supported both development and economic growth of numerous neighborhoods in Manhattan, Brooklyn, the Bronx and Queens.
As part of the franchise agreement the owners had to sign, City Hall had direct control over the fare structure. For a period of time, owners actually make a profit with a five cent fare. After decades passed, the cost of salaries, maintenance, power, supplies and equipment would pressure owners to ask City Hall for permission to raise the fares. This additional revenue was needed to keep a good state of repair, increase the frequency of service, purchase new subway cars, pay employee salary increases and support planned system expansion.
Politicians more interested in the next reelection (and subscribing to the old Roman philosophy of free bread and circuses) refused this request each year for well over a decade. As a result, in order to survive, owners of both systems began looking elsewhere to reduce costs and stay in business. They started curtailing basic maintenance, delayed purchases of new subway cars, postponed salary increases for employees, canceled any plans for system expansion and cut corners to survive.
In 1932, NYC began building and financing construction of the new IND (Independent Subway -- today’s A, C ,E ,F and G lines). This new municipal system subsidized by taxpayers dollars would provide direct competition to both the IRT and BMT. Municipal government forced them into economic ruin by denying them fare increases that would have provided access to additional badly needed funds. Just like The Godfather, Big Brother made them an offer they couldn’t refuse. The owners folded in 1940 and sold out to City Hall.
In 1953, the old NYC Board of Transportation passed on control of the municipal subway system, including all its assets to the newly created NYC Transit Authority. Under late New York Gov. Nelson Rockefeller in the 60s, the Metropolitan Commuter Transportation Authority (MCTA) was created. The governor appointed four board members. The mayor also appointed four and the rest were from the suburbs. No one elected official controlled a majority of the votes.
In 1969, the MCTA became the Metropolitan Transportation Authority and took over management of the NYC Transit Authority.
In 1996, Metro Cards were introduced. These provided free transfers between the subway and bus. This eliminated the old two fare zones making public transportation an even better bargain. Purchasing a weekly or monthly Metro Card, LIRR or Metro North commutation ticket reduce the cost per ride and provides virtually unlimited trips. Employers offer transit checks which help subsidize a portion of the costs.
Fare increases for the NY MTA NYC transit bus, subway and Staten Island Railway, MTA Bus along with Long Island Rail Road and Metro North Railroad have been periodically required every few years. Fare hikes are needed if the MTA and operating agencies such as the NYC Transit bus, subway and Staten Island Railway, MTA Bus, LIRR and Metro North are to provide the services millions of New Yorkers count on daily. They are inevitable, due to increasing costs of labor, power, fuel, supplies, materials, routine safety, state of good repair, replacement of worn out rolling stock, upgrades to stations, yards and shops, as well as any future system expansion projects necessary to run any transit system and inflation.
New York State provides the MTA significant annual funding under the Statewide Transportation Operating Assistance (STOA) program. Via Federal Transit Administration grants which provide cash, riders and motorists continue to pay their fair share. Uncle Sam did even more by providing $3.9 billion under the first, $4 billion under the second and $6.5 billion under the third COVID-19 aid packages for a total of $14 billion. In 2020, the Federal Transit Administration provided the MTA with $1.4 billion in annual formula funding under various grant programs. In 2021, this should increase to $1.5 billion..
With receipt of billions from the third round of COVID-19 emergency funding, New York City Mayor de Blasio and New York Gov. Andrew Cuomo have sufficient revenue to balance their respective budget shortfalls.
Now they now have no excuses to pay a significant portion of their respective fair shares of $3.5 billion each previously agreed to provide toward the MTA $51 billion 2020 - 2024 Five Year Capital Plan and more in annual operating assistance.
Larry Penner is a transportation advocate, historian and writer who previously worked for the Federal Transit Administration Region 2 NY Office. This included the development, review, approval and oversight for billions of dollars in grants which provided funding for capital projects and programs to the NY MTA, NYC Transit, Long Island and Metro North Rail Roads, MTA Bus, NYC DOT, NJ Transit and more than 30 transit agencies in New York and New Jersey.