How to fund the MTA

By Felix Salmon
November 20, 2009
Alex Pareene has a wonderful rant about New York's MTA, which picks up on this astonishing line from the Daily News:

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Alex Pareene has a wonderful rant about New York’s MTA, which picks up on this astonishing line from the Daily News:

In addition to the 2010 budget, the MTA released a four-year fiscal plan. It envisions 7.5% fare and toll hikes in 2011 and 2013 as the agency tries to establish a pattern of regular inflation-based increases.

‘Cos obviously consumer prices generally are going to rise by 15.5% between now and 2013.

Pareene also has a very good point about the fungibility of city revenues:

Fares are simply taxes—incredibly regressive taxes, just like the sales taxes that New York City residents suffer to fund our own transit while suburban New Yorkers bitch about the prospect of being charged to clog our streets with their cars, and Jersey dicks bemoan the tolls they have to pay to enter the city where they make all of their money while contributing nothing back.

This is one reason why Charles Komanoff’s plan for reducing MTA tolls while implementing a congestion charge makes so much sense — and it’s a reason which has yet to fully penetrate the consciousness of most New Yorkers. There’s no particular reason why the MTA’s revenues should cover the MTA’s costs, especially when the MTA benefits the city in so many other ways, such as reducing congestion and increasing possible population density and therefore total taxes. Yet somehow everybody seems to blindly accept that the MTA should cover most of its costs through selling MetroCards. Sad.

5 comments

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Increasing NYC’s population density, even if it bumps up tax revenue, is going to lower its quality of life below the questionable level it’s at right now.

Posted by Mike in NYC | Report as abusive

I would be very interested to know how much of these rising costs are for pension expenses, which also rise with inflation. Roger Lowenstein’s “While America Aged” uses the history of the MTA and its pension fund as a case study of short-term thinking by city management intent on avoiding wage increases by making outrageous promises that future administrations (and, of course, citizens) will get stuck with “someday” long after the people who made the promises are out of office. That someday would appear to be today. Or maybe 2011.

Posted by ajw | Report as abusive

New York could provide adequate transit funding by taxing that portion of land value which would disappear if transit service were eliminated. Transit would simply be collecting a portion of the value it creates. If transit doesn’t create enough land value to cover its costs, then people don’t value it enough to be worth subsidizing and there is no excuse to fund it.

Unfortunately ‘congestion charges’ for cars (which of course are taxes) do not reduce congestion. They have not done so in London, where I was a Member of the London Assembly (the body which is supposed to hold the Mayor to account but has no powers). But these charges do damage businesses in the charging area. In addition, there is no evidence of so-called ‘congestion charging’ helping to keep the costs of public transport down – just look at the eye popping inflation busting increases being rammed through every year in London. Long after the C-Charge was introduced. Oh, and of course the C-charge has doubled in price in four years – when all the politicians promised it would not be increased.

Posted by Damian Hockney | Report as abusive

Pareene laments “suburban New Yorkers.” I’m not sure if the reader understands, though, that many outerborugh drivers–Queens, Staten Island, Brooklyn–use cars to commute to Manhattan. Just to clarify, those aligned against the tolls are not just non-NYC residents.

Posted by Bill | Report as abusive