New York’s MTA recently announced, to great acclaim, that it would “save the fare” for another year, continuing a political game that has gone on as long as there has been a subway system in New York. The long-term results of that game have been terrible. To prevent increases, money has been borrowed and maintenance deferred, until a crisis point is reached and the fare goes up anyway – by a massive amount, generally in a recession when people can least afford it. In the city’s history the typical fare increases have been 20%, 25%, 33%, 50%, even 100% (from five cents to ten cents). It is only during the 1984 to 1994 period that somewhat smaller increases – of 11% or less – were the norm. Deferred fare increases have been paid back with interest, one reason the pay-per-ride subway fare has in the end risen faster than inflation – by 45% from 1904 to today in real dollars. (see attached chart). Think about it – all those populist heroes defending the working people and middle class by fighting fare increases over all the years delivered a 45% increase in the cost of a subway ride adjusted for inflation over a century! There really is a sucker born every minute. In contrast U.S. postage stamps and inflation have gone up by about the same amount over the past century. Postage stamp increases have been smaller, with the latest at just two cents (5.1%), but more frequent – and generally not subject to grandstanding my members of Congress. In New York the game goes on, but according to the blog DCist, a transit board member in of all places Washington D.C. has proposed ending the game there once and for all.
Today, things work in Washington the same way they work here.
The fare “remains constant, year after year, until the Metro overlords decide that a fare increase is in order…Each time one of these sporadic fare increases occurs, it set off a chain reaction of outraged passengers, allegations of wasteful spending and lax management, and city officials clamoring to fight the hike at all costs (pun intended). Nothing in this histrionic process is terribly productive, however, and whatever the result, passengers, Metro, and city officials are left with unanswered questions. Was a fare really warranted, or am I being overcharged? Does Metro need more money, or could it balance the books with existing revenue? As universal as it is to U.S. transit systems, this system of arbitrary fare increases is absurd. The lack of a dedicated source of funding creates enough financial uncertainly for Metro's budget chiefs without them having to worry about the fact that a $1.35 fare will cover less of a Metro ride this year than it did last year.”
Unlike in New York, however, someone in authority has proposed something different.
“At a District Council meeting on Metro's budget yesterday, instead of offering a standard fare hike proposal, Catoe asked a great question. Rather than ambushing riders with irregular cost increases that are less that transparent, why not set a formula for determining when fares will increase and by how much? The general idea is to tie fares to cost-of-living measures, such as the consumer price index or the rate of inflation…‘With such a system, fares would rise at regular intervals instead of big jumps every few years. Furthermore, linking fares to an economic index makes fare increases transparent, predictable and easily understandable.’”
While I lack official stature, I did once suggest tying the average transit fare to the biggest transit cost, with the fare rising each year by the total employment cost per worker (wages and benefits). The fare would be set initially so that the subway would break even on an auto-equivalent basis, which in my definition means it would cover the cost of the ongoing purchase, maintenance, and operation of the trains, just as drivers pay for their own automobiles. The cost of the stations, which are the equivalent of public buildings, and the rights of way, which are the equivalent of public streets, would be covered by other revenues. For drivers, the tolls and tax revenues diverted to transit may considered be the equivalent of rent, paid to transit riders in exchange for their giving up their equal right to drive and occupy scarce street space. (Buses would require deeper subsidies, at the same fare, as they are as much a social service as a transportation system).
Such a system would make it impossible for politicians to trump each other by offering a win-win-win deal for everyone – no fare increase, no toll increase, higher wages and pensions for transit workers, lower taxes, more service. As they did in the 1990s and continue to do today. Then, perhaps a decade from now we wouldn’t face the lose-lose-lose choice we have been left with – big fare increases coming, a choice of either higher taxes and/or other revenues such as congestion charges or deferred maintenance and system collapse, and labor strife. What we need is someone to tell the various interests that what we face today is a result of what all of them have done. All of them, including opponents of higher fares. What we get is politicians who say the MTA is engaging in deception, because if we took all the money borrowed for capital improvements and just spent it in the next two years, things could be great – for those who years.
I read somewhere that a long-term plan for MTA financing is coming in July. I hope it won’t involve another massive increase in 30-year obligations, with 30-years of revenues pledged to them, to fund just another five years of capital spending, as in the 2005 to 2009 MTA Capital Plan (and 2000 to 2004). Given how strong the “something for nothing” mentality is, and how no one is even prepared to acknowledge that (given the unlimited ride cards) the average fare has in fact been cut enormously relative to MTA costs in the past 12 years, the MTA Board ought to just impose a permanent ongoing fare increase the next time the fare has to rise. Yes the usual suspects will scream. But they’ll scream anyway, even for a tiny fare increase, and look at the results of what they have done – ongoing budget problems limiting service with ridership at 50-year highs, and in the end higher fares as well. The Board might as well pass a permanent annual increase and get it over with.