MTA Rides Riders Harder Than Most, Group Says

It only took three weeks for the MTA to “postpone” the service upgrades promised after the March fare hikes, so we were skeptical when officials told frustrated straphangers that the package might be approved in June if the MTA’s financial situation improved.

MTA Executive Director Lee Sander said Wednesday that the transportation authority faced an operating deficit of as much as $500 million to $700 million next year—mainly due to a dip in real estate tax revenue and the rising costs of fuel—and warned that if Albany did pitch in more money to fill the gap, the burden would fall on passengers.

But, according to a statement issued today by riders advocacy group the Straphangers Campaign, New Yorkers already pay 55 percent of the city’s transit costs, giving them the highest fare burden in the nation. In other large transit networks, fares account for an average of 40 percent of operating budgets.

According to Straphangers, the MTA is the fifth largest debtor in the nation, behind California, New York State and City, and Massachusetts. Meanwhile, each year, $2 billion of the MTA’s $10 billion operating budget goes to "debt service," or paying off the tens of billions of dollars of bonds it has issued to fund transit repairs.

Straphangers’ statement below:

STATEMENT ON A POSSIBLE MTA FARE INCREASE Thursday, June 12, 2008

Subway and bus riders and suburban commuters were just hit with fare increases in March, three months ago! But now the MTA is warning that it’s facing a deficit of hundreds of millions of dollars next year and that the agency may have a large deficit in 2009, putting pressure on the fare and service.

At the same time, the MTA has a shortfall of an astonishing $17 billion in its next five-year rebuilding program, running from 2009 to 2013.

Governor Paterson has just appointed a 12-member panel to make recommendations on the MTA’s finances for the next decade. Their report is due December 5, 2008. Whatever action Governor Paterson and the MTA takes, they must address both the operating and the capital needs of the transit system at the same time. A fare increase – without new money to operate and fix the system – would be a slap in the face to millions of riders.

"Proposing a fare hike before the Ravitch Panel reports would be something out of Alice in Wonderland: first the execution, then the trial," said Gene Russianoff, staff attorney for the Straphangers Campaign.

New York riders already have the highest fare box burden in the nation, paying 55% of New York City Transit’s costs. That’s compared to an average 40% of for the country’s large transit systems.

The single fastest growing expense for the MTA is "debt service," which in plain English is money to pay off the tens of billions of dollars of bonds it issued to repair the transit system. The MTA is the fifth largest debtor in the nation, behind California, New York State and City, and Massachusetts. Each year, two billion dollars of the MTA’s ten billion dollar operating budget goes to pay off these bonds..

The MTA could close these gaps either with new government aid or fare and toll increases, along with administrative efficiencies and service cuts. "Cutting service now while ridership is swelling makes no sense," said Russianoff.