Tuesday, June 5, 2007
|For More Info: Gene Russianoff
(212) 349-6460 or (917) 575-9434
Subway And Bus Fare Could Go To $2.40 by 2010,
New York City Independent Budget Office Forecasts
30-Day MetroCard Could Go From $76 to $92,
As MTA Faces Large and Mounting Deficits
Base Fare Could Go to $3.00 by 2010 and 30-Day MetroCard to $112
Without Any New State Aid
Commuter Rail Road Fares Also Likely To Rise
Straphangers Campaign Calls on Governor Spitzer for Help;
Urges Him to Push Hard for Congestion Pricing
The NYPIRG Straphangers Campaign today released an analysis of the MTA's finances over the next three years. The review was conducted by the New York City Independent Budget Office at the request of the Straphangers Campaign, which is releasing the analysis.
The IBO forecasts that the base subway and bus fare would have to rise 20% from its current level of $2.00 to $2.40 by 2010 - even if other sources of revenue grow at a similar rate, such as 20% higher yields from dedicated taxes, state subsidies and automobile tolls.
The cost of a 30-day unlimited MetroCard would have to rise from the current $76 to $92 under this scenario. (A copy of the IBO analysis is attached.)
The IBO also found that "closing the MTA's budget gap through fares alone would require an increase of 48% over 2007 levels by 2010. Under this scenario, the IBO forecast that "the cash fare would rise to almost $3, and the cost of a 30-day MetroCard would rise to $112 from the current $76."
Growing operating deficits - and the resulting pressure on fares - were due to "a dramatic deterioration of [the MTA's] financial situation over the next three years," wrote the IBO. The IBO relied on MTA projections for its analysis, finding them realistic, and did not make its own projections.
While the MTA is expecting a surplus of $270 million in 2007, the IBO "projects large operating budget shortfalls" in 2008 ($799 million), 2009 ($1.46 billion) and 2010 ($1.78 billion), according to the IBO's "Review of the MTAís Financial Outlook and Options for Closing the Gaps."
The IBO noted that "debt service" alone - which are payments on the interest on scores of billions of dollars of bonds issued by the MTA for vital transit repairs - would increase by $563 million between 2006 and 2010, going from $1.310 billion annually in 2006 to $1.884 in 2010.
"If we don't get financial help soon, transit riders will face whopping fare hikes," said Gene Russianoff, senior attorney for the Straphangers Campaign, a riders group. "We call on Governor Elliott Spitzer for help, especially in pressing for Mayor Michael Bloomberg's congestion pricing proposal to help bring billions to the transit system."
Among the IBO's findings (on page nine of the attached analysis) for closing the budget gaps through 2010 were:
Examples of possible revenue options reviewed by the IBO included:
• phasing-in 20% fare hike yields $342 million (2008), $624 million (2009) and $764 million (2010)
• phasing-in 20% toll hike yields $114 million (2008), $208 million (2009) and $255 million (2010)
• 1/8 % increase in downstate sales tax yields $236 million annually;
• 1/8 % increase in real property transfer tax yields $30 million annually
• extending mortgage recording tax to coops yields $140 million
• increasing state general aid to MTA to level permitted under law yields $444 million annually.
Russianoff noted that Mayor Bloomberg's recent congestion pricing plan would help yield $900 million annually for transit, when coupled with proposed new commitments of state and city aid.
Only "modest savings were available from reductions in service," wrote the IBO. For example, the IBO noted that a 2006 MTA proposal to discontinue service on 95 New York City Transit late nights was "projected to save only $8.7 million, about 1/6th of one percent of NYC Transitís total operating expenses."
The IBO analysis also noted that "the MTA's main labor contract (with TWU Local 100) does not expire until January 2009, so any initiative in this area would be a long-term strategy."
The IBO was created by a City Charter Revision Commission in 1989. Its mission is to provide independent, non-partisan financial to public officials and civic groups. The IBO director serves for a fixed, four-year term.
In their analysis requested by the Straphangers Campaign, the IBO concludes that: "given the size of the MTA's projected shortfalls it is likely that remedying the problem will require a mix of actions and sources that will spread the burden across a broad range of the region's businesses and residents."
More information on Mayor Bloomberg is congestion pricing proposal can be found at www.campaignforNewYork.org. It is supported by many civic organizations.