The March 2013 fare hike that raised the cost of a New York City monthly MetroCard from $104 to $112 isn't a one-time ordeal.
Fares are set to rise in 2015, and again in 2017.
The Metropolitan Transportation Authority (MTA) is working to expand and improve the transit system, and that takes money.
It also takes money to cover pensions, rising healthcare costs, and interest on loans the MTA has taken out.
But funding is tricky: About 40% of the MTA's money comes from state and local subsidies, federal funding, and dedicated taxes — none of which its Board can alter.
So when the subways need money, fare and toll hikes are an obvious way to get it. (The MTA can also borrow cash by issuing bonds.)The Fare Hikes Are Coming
The 2015 and 2017 fare hikes will likely need to produce a 7.5% increase in revenue to keep the budget balanced, though that number could be lowered with savings or revenue elsewhere, MTA spokesperson Adam Lisberg said.
In July, the New York City Independent Budget Office crunched the numbers, predicting that an 8.4% fare increase would give that 7.5% yield. (Higher prices drive away some business, so fares need to go a bit above the hoped for revenue increase.)
The IBO also calculated how much fares will be ten years from now, if hikes continue at the current pace (8.4% every two years). The picture isn't pretty, but it's not grisly, either, since it provides numbers that account for inflation.
If these are on point, a monthly pass will jump from $112 today to $168 in 2023 (that will feel like $128.71 in today's dollars). Here's the full chart:
Lisberg cautioned that because the MTA has not set a fare plan past 2017, there's no way to know how much fares will rise.
So take that $168/month figure with a big grain of salt: Counting for inflation, it will feel more like $128.71 in today's dollars, which isn't a horrific rise over the current $112.
And there's hope that the MTA will find a way to avoid making biannual hikes are permanent feature, if it can find ways to reduce costs (while improving service).
On that front, higher taxes and better subsidies would be a big help, but don't count on the New York State legislature for those — it's been more inclined to steal from the MTA's budget than bolster it in recent years.
More From Business Insider
- These Simple Ideas Are NYC's Best Bet For Improving The Subway System Right Now
- CHART: The Airports Where You Can Use The TSA's Awesome Expedited Security Checks
- The MTA Doesn't Care How A Shark Ended Up On A NYC Subway Train
- Budget, Tax & Economy
- New York City