Subways and Buses: Fare Enough?
by Sandy Ikeda
Sat, 22 Dec 2007 at 1:00 AM
With the blessing of Governor Spitzer and Mayor Bloomberg, the MTA voted earlier this week to raise subway and bus fares as well as the tolls for tunnels and bridges. You can read about it here. A proposal to charge lower fares during off-peak hours, an idea that seemed awfully good to me, was quietly killed before it reached a vote.
In any case, some vented their outrage at the hike. For example, a representative of a subway riders' group I heard on New York One the other day angrily intoned, "Those who use the system shouldn't have to pay for all of it!" He went on to demand money from the state legislature to forestall the increase.
One of the reasons given for the increase, despite an estimated $500 million surplus at the MTA this year, is to prepare for large deficits expected to begin in 2009 owing to escalating debt service (as well as the rising cost of employee health care and other expenses). Over the years, the MTA has borrowed to cover its annual operating deficit because it's politically dangerous to try to do this by raising fares. Here's an article from the Manhattan Institute website written in 2005, the last time fares were raised, explaining that this problem's been around for quite a while. Debt service that year evidently absorbed 12% of MTA revenues. Until the city government and the MTA are willing to take the radical steps necessary to remove roadblocks to greater efficiency (I will discuss some of those another time), deficits will continue and the debt service will swell.
But my point here is this: Isn't arguing that "those who use the system shouldn't have to pay for all of it" the same as saying "those who don't use the system at all should have to pay for some of it"? Naturally, the representative wouldn't put it that way because it exposes the true nature of the transaction, but that's essentially what he was asserting (at the top of his voice). So a teacher in Fredonia or a bus driver in Buffalo winds up subsidizing my subway ride to my dentist on the Upper West Side.
One could counter that the subsidy is not for me but for the low-income worker who would have to struggle too much to afford a fare that reflected the full cost of his ride. Perhaps, but does that really justify taxing someone who gets virtually no benefit from the system, who might herself be among the working poor, to cover a portion of his (and my) costs? How is that fair?
(Would it be fairer if a portion of the revenues from a congestion price charged to drivers somehow got credited to the MetroCards of low-income subway riders? Maybe a bit, but this might also create even more problems, in monitoring costs and fraud to name just two, than it would solve. See also my previous post on "unintended consequences of congestion pricing.")
Special-interest pleading usually does a better job of disguising itself as social justice.
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