Bus and subway fare hike reprieve? Only if you count on union concessions

Posted November 14, 2013 By Claire Moses

What a difference a season can bring.

In a big change since July, financial projections at the Metropolitan Transportation Authority have gone to fairly dire to somewhat hopeful.

According to the MTA’s newest financial plan, presented to the board on Wednesday, fare hikes the agency has indicated are coming for 2015 and 2017 will likely be lower than previously projected.

Photo: MTAPhotos/Flickr

The latest financial estimates have subway and bus fares, as well as bridge and tunnel tolls, rising by 4 percent, down from the previous 7.5 percent.

The lower expected fare hike comes as a result of “cost cutting and increased tax and operational revenue,” according to the MTA.

“We try to keep costs down in order to minimize the financial burden on our customers, and as this financial plan shows, we are succeeding in that effort,” said MTA Chairman and CEO Thomas Prendergast.

While the new numbers offer a brighter outlook for riders, the future of subway and bus fares is hazier than the plan might suggest. Ultimately, their fate largely depends on the outcome of negotiations with the labor unions, which are currently underway.

Transport Workers Union Local 100 — the MTA’s largest union — has been working without a contract for two years.

The MTA is banking on “three years of net-zero wage growth” as the outcome of negotiations with the unions — meaning that any retroactive increases in wages would have to be offset by changes in work rules or other cost-saving concessions by the workers.

If the MTA and its workers’ unions do not come to an agreement, the authority says its costs could increase by $300 million annually and fares could shoot back up to previously projected levels.

The union’s president, John Samuels, has challenged the MTA’s projections for union concessions and fare hikes, calling the authority “flush with cash.”

As far as the overall health of the economy, “significant risks remain,” the MTA’s statement acknowledges.

Analysts at the New York City Independent Budget Office agree that some numbers at the MTA are moving in a healthy direction, with unexpected new savings in the paratransit program for mobility-impaired riders adding to the resources available. At the same time, they note that the MTA urgently needs new revenue, especially to fund its capital program — the pool of money used to keep the infrastructure in the best shape it can be.

“The MTA has no shortage of needs,” said IBO spokesperson Doug Turetsky. “The capital plan is short on funding and there’s no shortage of day-to-day operating needs either,” such as cleaning trains and extending bus routes.

He also suggested the MTA’s anticipated outcome of its union contract negotiations skews toward optimism. “Raises paid for solely through givebacks may be a tough line to hold,” he said.

Increased revenue — from fare hikes or other sources — could let the MTA borrow less than it otherwise would have to to complete major construction projects, such as the Second Avenue Subway and the extension of the No. 7 line.

The Straphangers Campaign, a rider-advocacy arm of the New York Public Interest Research Group, has praised the lower projections.

In July, the advocacy group, in cooperation with the Independent Budget Office, projected that fares could be as high as $3.25 a ride and $145 a month.

“Can the MTA do even better by its customers?” asked Straphangers director Gene Russianoff. “The Straphangers Campaign will be watching.”

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<h1>Bus and subway fare hike reprieve? Only if you count on union concessions</h1>What a difference a season can bring.
In a big change since July, financial projections at the Metropolitan Transportation Authority have gone to fairly dire to somewhat hopeful.
According to the MTA’s <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.mta.info/mta/budget/nov2013/2013-November-Financial-Plan-Volume1.pdf');" href="http://www.mta.info/mta/budget/nov2013/2013-November-Financial-Plan-Volume1.pdf">newest financial plan</a>, presented to the board on Wednesday, fare hikes the agency has indicated are coming for 2015 and 2017 will likely be <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/2013/07/25/next-station-fare-hike/');" href="http://www.thenewyorkworld.com/2013/07/25/next-station-fare-hike/">lower than previously projected</a>.
<div id="attachment_13085" style="width: 310px" class="wp-caption alignright"><img aria-describedby="caption-attachment-13085" class="size-medium wp-image-13085" alt="Photo: MTAPhotos/Flickr" src="http://www.thenewyorkworld.com/wp-content/uploads/2013/11/greenpoint-300x169.jpg" width="300" height="169" srcset="thenewyorkworld.org/wp-content/uploads/2013/11/greenpoint-300x169.jpg 300w, thenewyorkworld.org/wp-content/uploads/2013/11/greenpoint-352x198.jpg 352w, thenewyorkworld.org/wp-content/uploads/2013/11/greenpoint-500x281.jpg 500w, thenewyorkworld.org/wp-content/uploads/2013/11/greenpoint.jpg 568w" sizes="(max-width: 300px) 100vw, 300px" />Photo: MTAPhotos/Flickr</div>
The latest financial estimates have subway and bus fares, as well as bridge and tunnel tolls, rising by 4 percent, down from the previous 7.5 percent.
The lower expected fare hike comes as a result of “cost cutting and increased tax and operational revenue,” according to the MTA.
“We try to keep costs down in order to minimize the financial burden on our customers, and as this financial plan shows, we are succeeding in that effort,” said MTA Chairman and CEO Thomas Prendergast.
While the new numbers offer a brighter outlook for riders, the future of subway and bus fares is hazier than the plan might suggest. Ultimately, their fate largely depends on the outcome of negotiations with the labor unions, which are currently underway.
Transport Workers Union Local 100 — the MTA’s largest union — has been working without a contract for two years.
The MTA is banking on “three years of net-zero wage growth” as the outcome of negotiations with the unions — meaning that any retroactive increases in wages would have to be offset by changes in work rules or other cost-saving concessions by the workers.
If the MTA and its workers’ unions do not come to an agreement, the authority says its costs could increase by $300 million annually and fares could shoot back up to previously projected levels.
The union’s president, John Samuels, has challenged the MTA’s projections for union concessions and fare hikes, calling the authority <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.nytimes.com/2013/11/14/nyregion/mta-sees-smaller-rise-for-its-fares-in-15-and-17.html');" href="http://www.nytimes.com/2013/11/14/nyregion/mta-sees-smaller-rise-for-its-fares-in-15-and-17.html">“flush with cash.”</a>
As far as the overall health of the economy, “significant risks remain,” the MTA’s statement acknowledges.
Analysts at the New York City Independent Budget Office agree that some numbers at the MTA are moving in a healthy direction, with unexpected new savings in the paratransit program for mobility-impaired riders adding to the resources available. At the same time, they note that the MTA urgently needs new revenue, especially to fund its capital program — the pool of money used to keep the infrastructure in the best shape it can be.
“The MTA has no shortage of needs,” said IBO spokesperson Doug Turetsky. “The capital plan is short on funding and there’s no shortage of day-to-day operating needs either,” such as cleaning trains and extending bus routes.
He also suggested the MTA’s anticipated outcome of its union contract negotiations skews toward optimism. “Raises paid for solely through givebacks may be a tough line to hold,” he said.
Increased revenue — from fare hikes or other sources — could let the MTA borrow less than it otherwise would have to to complete major construction projects, such as the Second Avenue Subway and the extension of the No. 7 line.
The Straphangers Campaign, a rider-advocacy arm of the New York Public Interest Research Group, has praised the lower projections.
In July, the advocacy group, in cooperation with the Independent Budget Office, <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/2013/07/30/mta-fares/');" href="http://www.thenewyorkworld.com/2013/07/30/mta-fares/">projected that fares could be as high as $3.25 a ride and $145 a month.</a>
“Can the MTA do even better by its customers?” asked Straphangers director Gene Russianoff. “The Straphangers Campaign will be watching.”

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