Public Engagement Webinar Presentation

Webinar Slide Presentation (1.15MB PDF format)

Webinar Questions & Answers

On Monday, December 10, the MTA co-sponsored its first-ever webinar on the fare and toll proposals that are currently being deliberated by the MTA Board. Unfortunately, a technology glitch prevented some participants from seeing all the materials presented or from hearing all the answers that were provided to the questions being asked online. In addition, all of the several hundred questions that were submitted online could not be answered in the time allotted for the session. Since many of which were similar in nature, we have grouped them into categories and are providing answers below. (Those answers have been provided by MTA Chief Financial Officer, Gary Dellaverson and MTA Director of Support Services Fredericka Cuenca.)

Q. Why are tourists and non-locals not being impacted by the fare increase?

A. All subway and bus customers choose the particular MetroCard that best suits their needs (which is the advantage of MetroCard). While it is true that most infrequent riders do not use the unlimited cards, there is no reason to believe that these riders are ‘mostly tourists’. In fact, tourists frequently use the one day pass which is proposed to have the highest percentage increase. Additionally, at the public hearings the MTA held throughout the region last month, many customers specifically noted the hardship that an increase in the base fare would have. We believe that many riders who can’t always afford to put $10 or more on a MetroCard do pay the full fare.
Q. How can the MTA justify a fare/toll increase with a budget surplus?

A. While the MTA will close 2007 with a very substantial cash balance (surplus), it pales in comparison to the $6 billion in deficits that are forecast over the next four years. Unfortunately, the cash balance is needed, in conjunction with many other actions including the fare increase, to maintain balance through 2009. Enterprises as large as MTA that are subject to many different economic variables rely on multi-year financial planning. The alternatives to regular fare increases are either sporadic and unpredictable very large fare increases or starving the transit system of resources. Both alternatives have been tried in the past with less than satisfactory results.
Q. What cost cutting measures does the MTA have in place?

A. The new budget has $50M in reductions that improve the bottom line in addition to another $65M in reductions that are reinvested in service quality programs (e.g. additional cleaning). Further there are a number of initiatives under way to save money over the longer term, such as consolidating 'back office' functions.
Q. What immediate benefits will the fare hike create for riders?

A. The new budget will fund certain new initiatives like new bus service on Staten Island, new Bus Rapid Transit lines, a number of safety and security initiatives and a package of new services across the MTA (bus, subway and commuter rail) that will be implemented after the first quarter of next year, as long as our tax receipts are consistent with our projections.
Q. Why can’t the fare increase be tabled until the State budget is complete?

A. Delaying the fare increase was rejected after it became clear that our local and state funding partners are facing a difficult fiscal situation and that any additional funding would be best spent on the MTA’s enormous capital (infrastructure) needs.
Q. Why is the fare going up every two years?

A. MTA proposes small, regular fare increases tied to inflation every two years to regularize the funding for the system and to avoid having to adopt damaging, irregular large increases that depress ridership.
Q. What were contributing factors to the determined future deficit?

A. The principle drivers of the deficit are growth in ‘uncontrollable’ expenses like debt service and health benefits.
Q. What alternatives beside fare increases have been reviewed as possible solutions?

A. The MTA’s financial plan is designed to fill $6 billion in deficits over four years while actually increasing service. The responsibility for filling these gaps is shared. The MTA is doing its part with belt tightening efficiencies; labor has been asked to make a contribution in the next round of contracts; our government partners have been asked for significant increases; and finally, our customers have been asked for a less than inflationary fare and toll increase.
Q. Are the MTA’s accounting books open to the public?

A. YES. MTA produces an enormous amount of financial information available to the public at its public meetings and on its website. Monthly Finance Committee meetings are open to the public and simulcast on the web. The State comptroller, which has criticized the MTA in the past, now says that the MTA’s finances are transparent.
Q. Why not raise the bridge and tunnel fares?

A. Tolls are going up at the same time as fares.
Q. If the fare hike does not go through, would service be interrupted?

A. Service would not be interrupted but the MTA Board would be legally obligated to balance the budget in other ways, including considering other reductions in existing service levels.
Q. Can’t the MTA raise the advertising rates on its billboards and ads? Can advertising be put on the back of the MetroCard?

A. MTA will raise about $500M next year from other sources including advertising and rents. Rates are set by competitive bids. Other sources of advertising revenues are always being reviewed and MetroCard has hosted ads in the past.
Q. Why the change in the bonus program? The changes in the bonus program make it unnecessarily complex and confusing to riders. With the decreased bonus and buy-in starting at $7, under this proposal we would have a MetroCard with $8.05 in fares selling for $7. The good thing about the 6-for-5 and 10-for-11 bonus was its simplicity. The current proposal loses that elegance.

A. Of course you are accurate that 10% or 20% bonuses are easier (or more elegant) to calculate. The bonus, all the way back to the 10-pack token, had been 10%. It was increased to 20% as part of the 2003 fare increase to moderate the effect of the 33% increase in the base fare. This year, since the base fare was not increased, the bonus percentage was the only tool available to increase revenues from this segment of the riders. The alternative would have been much higher increases for unlimited card buyers. In addition, reducing the bonus back to 10% would have been a disproportionate increase to the bonus card users, albeit more elegant.
Q. There is a 4% MTA surcharge on gas and electric use. Is 100% of the money collected going to the MTA? What is the total revenue collected in 2006 through this fee?

A. The "surcharge" on gas and electric use is determined by the utility companies as a pass-along of their state corporate taxes; a portion of those taxes are dedicated to mass transportation in the state, some of which goes to the MTA. MTA received $1.26 billion from the state appropriation of these business taxes, which includes sales taxes, corporate taxes and taxes on distributors of petroleum products from all businesses in the MTA service region as well as individuals’ sales tax payments.
Q. Why is it that as a rider on the LIRR, I am forced to pay twice for commuting once. What I mean is that most riders on the MTA system who transfer from one mode of transportation (e.g. bus) to another (e.g. train) are given a transfer ticket so they don't have to pay again. This is not the case for riders on the LIRR. This is extremely unfair especially when you consider that most commuters on the LIRR will only take the subway an average of two stops.

A. Both MTA railroads (Long Island Rail Road and Metro-North Railroad) are distinct from each other and the bus and subway network. Although free transfers are technically feasible, their cost would have to be absorbed by other customers who don’t use that connection. Since the subway and bus network’s fares are not distance based, there is no way that trip length can be calculated into the fare.
Q. Why are NYCT, LIRR, and MNR operated as mutually exclusive entities even though they are all under the MTA umbrella?

A. Each of the MTA's operating agencies pre-existed as private companies (except for the IND subway lines). Since each have their own statutory authority (and the two railroads operate under Federal law), many laws would need to be changed. MTA attempted in 2003 and 2004 to convince Albany to make those changes but did not succeed. The current MTA leadership is committed to breaking down boundaries and streamlining operations to the extent possible. We are working on improving regional connectivity and are exploring plans to consolidate many back office functions. We have already saved millions by consolidating some procurements on a pilot basis.
Q. Over the past 10 years, LIRR riders have seen an almost 40% increase in fares, and adding another 3.85% to our current fares will bring it over 40% ... whereas NYC Transit riders have effectively NOT had a fare increase (with Metro Card discounts figured in) for about the same period of time

A. Since 1995, the base fare has increased 33%. Since MetroCard passes were introduced in 1998, the one day pass has increased 75%; the weekly pass has increased 38% and the monthly has increased 20% before application of the current increases. Increases are very comparable across agencies, and in all cases provide more value at a comparable or lower price than other transit systems in the country.
Q. Why is the inflation in MTA fare prices higher than general rise in prices? Over the last 10 years the prices of MTA has gone up more than other prices.

A. Inflation in our region has gone up 32% in the last ten years. Commuter rail fares and average bus and subway fares have risen at a substantially slower rate over that period, even including the proposed 2008 increases.
Q. When is the MTA going with full implementation of the MasterCard PayPass® throughout the entire system? When will the PATH Smartcard be accepted throughout the entire system?

A. The MasterCard PayPass is a pilot program. MTA is monitoring the progress of the program and will use this information as part of a study that will begin soon to determine how and when to upgrade its fare collection system. Integrating the PATH SmartCard into MTA's fare collection system will be part of our upgrade analysis.