Transit riders are feeling the pinch of the recent MTA fare hike and are looking for someone to blame. Some are pointing their fingers at MTA executives for their $250,000+ salaries; others are blaming transit workers, who earn an honest living of around $60,000 a year. Riders' anxiety is understandable, as fare hikes cost $200 every year and there's no end in sight.
Since the recession hit, the MTA raised the fares four times. The first was in 2008 to match the rate of inflation with a 3.9 percent hike. The MTA has been taking out loans for years to pay for expansion projects and other capital investments. But just like a credit card bill, debt eventually needs to be paid off. And in the MTA's case, their debt service has a balloon-type borrowing program that goes up every year. The big banks -- you know, the folks who caused the recession -- got bailed out by the Federal Government with 0 percent interest loans.
But the MTA is busting its budget to pay off their debt, which is about 17 percent of its general operating expenses, with interest rates at about 4.5 percent. As the MTA's debt continues to increase, so do the fares, with the last two hikes coming in at three times the rate of inflation. If the big banks can get zero interest loans from the Federal Government, can't the publicly subsidized MTA get a better deal?
All across the country, cities and transit authorities are suing big banks because of their manipulation of LIBOR, or the London interbank rate, which has been the standard for determining lending rates for millions of loans. The MTA could do the same, renegotiate a better interest rate, and stop allocating so much of its budget every year to paying off their debt.
Meanwhile, transit advocates are calling on the state and city to fork up more money for public transit, as they've been systematically defunding the MTA since the mid-1990s. Despite recent fare hikes, Governor Andrew Cuomo's 2013 budget diverted $20 million from the MTA, and New York City is allocating just $160 million per year towards the MTA's budget--which is less than Mayor Koch allocated in the late '80s. A fair investment from both the city and state would significantly lessen the rider's burden of rising transit costs.
Finally, the Transportation Infrastructure Bond Act, which would repair existing road and bridge infrastructure and invest $770 million in the MTA's five-year capital plan, has been introduced in the New York State Assembly. Not only could the bill create good jobs, but it would be a boost to the economy.
None of these solutions are going to be easy wins, and none of them are going to be complete fixes. But we can't scapegoat the honest salaries and earned benefits of hardworking people. And we can't let the right-wing use these recent fare hikes as an opportunity to privatize public transit, which will just lead to more fare hikes and service cuts. Instead, let's focus our energy on advocating for an affordable and equitable mass transit system, because if we want to prevent fare hikes in 2015, we need to start now.