A discounted MetroCard is a good idea, but where’s the money?

The New York City subway system is one of the great public equalizers in the United States – a single-fare, (mostly) comprehensive network of rail lines that bridges the yawning gap between rich and poor, and serves as the lifeblood that undergirds one of the few 24/7 cities left in the country.

But it’s also an imperfect subway system that regularly faces funding deficits, particularly with its long-term capital projects. Which is why a proposal floated by the Community Service Society of New York for a half-price MetroCard program for New Yorkers living below the poverty line, while a good idea – the report found that low-income city residents pay in excess of 10 percent of their annual budgets on public transportation – would be difficult to imagine.

The questions raised by such a program are whether there would be a high enough participation rate to justify an estimated $200 million in lost “farebox” revenue – a very small percentage of the MTA’s overall operating expenses – for an agency that can’t afford to lose transit dollars. And to that end, how would the program be funded? Through the annual MTA budget? Through the city Department of Transportation?

Nancy Rankin, one of the authors of the Community Service Society report, “The Transit Affordability Crisis,” shares these concerns, and floated a number of possible avenues for offsetting the loss of farebox revenue that this program would entail. Namely, the potential for a revenue stream provided by congestion pricing (Sam Schwartz’s MOVE NY plan is an interesting model), an increase to the state gas tax (though New York’s is already the highest in the country), or a millionaire’s tax (floated by the Assembly but ultimately left out of the state budget).

Congestion pricing through MOVE NY would be an interesting conversation starter – as it would toll the East River bridges and 60th Street in Manhattan while reducing tolls on bridges outside of Manhattan, and could raise up to $1 billion annually. But not all are convinced that fare subsidies are the best use of that hypothetical revenue source.

Nicole Gelinas, a Manhattan Institute fellow (and Slant columnist) who has written extensively about transit policy, does not like the idea of subsidizing fares out of the MTA budget (even using congestion pricing dollars) when there are much greater needs in the transportation system.

“My concern is that whether the city, the MTA, or a new revenue stream funds (a discounted MetroCard program), it comes out of capital funding,” Gelinas said. “I really don't like the idea of already starting to call upon any theoretical congestion-pricing money, for example, to fund fare subsidies. Worse subway service caused by failure to repair and replace stuff will, in the long run, harm the poor more than the fares they pay today.”

The Community Service Society is advocating for the program to be funded outside of the MTA’s budget, to protect it from the raiding of transit funds that tends to happen. Whether this would be through the city’s Department of Transportation budget – which already has seen its funding increase thanks to Mayor Bill de Blasio’s Vision Zero program – or another agency largely depends on how seriously the administration takes this proposal, which has already  received support from city Comptroller Scott Stringer and Public Advocate Letitia James.

One idea that Gelinas suggested is to fund a discounted MetroCard program through a welfare agency, such as the Human Resources Administration. As the Community Service Society points out, HRA already funds MetroCards for low-income individuals who participate in job training or educational programs, and for qualified trips for medical appointments covered by Medicaid, to the tune of $48 million. Why not expand the eligibility requirements for this program by increasing the income-level threshold to serve a larger population of New Yorkers? This would preserve the MTA’s farebox revenue, and alleviate the concern of losing even a small portion of its funding for much-needed capital projects.  

As a discussion starter, the Community Service Society has its heart in the right place by searching for deeper transit equity, but the same can be said for projects in the MTA pipeline, like the Second Avenue Subway, which require a lot of money that the agency can ill afford to lose.