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Options For The Fare Increase; Bridge And Tunnel Tolls; Transportation Plans In Lower Manhattan


Governor George Pataki and the Metropolitan Transportation Authority (MTA) made separate announcements in the last several weeks about the future of Lower Manhattan and increases in subway and bus fares and bridge and tunnel tolls. These announcements begin, but only begin, to show what New Yorkers can expect in these critical areas.


The Metropolitan Transportation Authority released seven options for higher subway and bus fares and is now conducting ten public hearings in New York City and the suburbs. It calls these options "several examples indicating the range of possibilities" for fare pricing structures. The "possibilities" include raising the average fare paid by riders by 10 percent, 20 percent and 33 percent. The Metropolitan Transportation Authority projects that a 33 percent fare hike would produce $574 million more in revenue annually while reducing ridership by 110 million. On the other side of the spectrum, the 10 percent fare hikes would raise about $190 million in revenue while reducing ridership by 25 million.

The MTA presents variations for the first two options, most of which would encourage use of unlimited ride passes, because pass prices would increase less than the base fare. Under several options, it would make sense for workers who know they will commute to work every day to buy an unlimited ride pass -- not currently the case except for riders who make several other trips a week.

By asking the public to comment on seven different options the agency has given the public much to chew on. But it also leaves open a number of questions. It is not clear whether the authority is considering adopting any specific option, much less which one that might be. It is not even clear how much revenue the authority aims to raise through this fare increase. Finally, officials have not said whether they will give the public time to comment on a final proposed fare. It is possible that the Metropolitan Transportation Authority will both announce and approve a fare increase at the same meeting, most likely in March.

The agency's presentation also mentions several other fare innovations such as insurance against losing the 30-day card,  a new bi-weekly pass (they call it a "forthnightly") and  a new five-day pass that could be used on nonconsecutive days. These are proposals advocated by the NYPIRG Straphangers Campaign and other pro-transit groups. These proposals hold the potential to continue MetroCard fare innovations and attract more riders, thus offsetting some of the ridership loss that inevitably occurs after a fare increase. (See my report on this topic.) It is not clear whether the MTA is seriously considering these ideas, however.


While much of the focus has been on the subway and bus fare, the Metropolitan Transportation Authority  also proposed higher commuter rail fares and bridge and tunnel tolls. Under the authority's proposals, tolls for the major bridges and tunnels connecting the five boroughs would rise from $3.50 to either $3.75 or $4.00. Tolls on the smaller crossings, such as the Henry Hudson Bridge, would increase from $1.75 to $1.90 or $2.00. In both cases, the 50 cent discount for EZ-Pass users would continue.

The Tri-State Transportation Campaign countered with a report (available as a pdf file) advocating a peak-period pricing scheme in which rush hour tolls would rise to $5.00 and non-rush tolls would stay at $3.50. The peak-period tolls would follow the example of the Port Authority, which charges more during rush periods on its Hudson River crossings. The idea is that drivers should pay more when demand for crossing the bridge is highest, hopefully causing some drivers to switch to off-peak periods and relieve peak hour congestion. Tri-State's report concluded that peak-period pricing would slightly increase traffic speeds during the rush hour.

The Metropolitan Transportation Authority is unlikely to adopt peak-period tolls, however, fearing that if it did so many rush hour drivers would divert to the free city-owned bridges instead of pay the toll. This idea may have to await tolling of the free bridges, which Mayor Bloomberg has proposed to help plug the city's budget gap.

Finally, the MTA proposed to close 128 part-time and 49 full-time token booths. The token booth closings, originally floated just before the Sept. 11 attacks put this and numerous other transportation issues on hold, have received particularly sharp resistance from subway riders who fear greater crime without the watchful eyes of token clerks, and who need the clerk's assistance to buy fare media and enter or exit through the turnstiles.


Meanwhile, on February 7 Governor Pataki released his long-awaited priorities for spending $4.55 billion in federal aid to rebuild Lower Manhattan transportation facilities. (See New York Times article). Topping the governor's list are a new PATH terminal at the World Trade Center site, revamping the Fulton Street complex and its maze of subway lines, and connecting both transit terminals with an underground pedestrian concourse. These proposals would rationalize and unite the Trade Center and Fulton Street transportation hubs and create a transportation terminal with a strong identity, similar to Grand Central.

The governor's plan will also rebuild the subway terminal at South Ferry and connect the station with the Whitehall Street subway station and a new Staten Island Ferry Terminal. In the South Ferry station, the obsolete single-track 5-car station would be replaced with a 10-car, three-track, two-platform terminal. These improvements would cut down on delays on the 1/9 line and thus speed commuter access between Lower Manhattan and Penn Station, a key goal for Lower Manhattan.

These three proposals would be completed later in this decade at a cost close to $3 billion.

Several other high profile projects were mentioned on the governor's list. Some appear likely to move forward, such as work on West Street and World Trade Center site infrastructure work that is necessary to support surface transportation. On the other hand, prospects are murkier for new rail links to the region's airports and new ferry terminals around Lower Manhattan. The total cost of these projects far exceeds the funding that is currently available. A rail link to Kennedy Airport, which is strongly desired by Lower Manhattan property owners and Mayor Bloomberg, would cost $3.7 billion by itself, according to the mayor, an uphill climb in the current fiscal climate.

Bruce Schaller is Principal of Schaller Consulting, which provides research and analysis to government, business and non-profit groups seeking to identify and meet customer needs in the transportation sector. He is also a Visiting Scholar at the Center for Transportation Policy and Management at New York University.

Bringing Back The Commuter Tax

There are three good arguments for the restoration of New York City's commuter tax: history, budget stability, and basic fairness.

From 1966 to 1999, commuters shared in the city's tax burdens, at least partially. For the suburbanite with an annual salary of $100,000, the commuter tax, which was set at a mere .45 percent of wages, totaled just $450 a year.

But if the city had the tax today, it would benefit by as much as $500 million. Or, to put another way, a commuter tax would pay for all of the city's youth, senior citizen, and parks services.

It is unfair for commuters to have a virtual free ride on the essential services they use. (Some commuters pay a different tax, the unincorporated business tax.) Police, fire, sanitation, and transportation services are among the most obvious.

New York City is the economic engine of the entire metropolitan region, and it seems reasonable for the beneficiaries of the engine to pay for some of the fuel.


When it comes to taxes, New York City is at the mercy of the State Legislature and the governor. With the exception of its real property tax, the state must approve any city tax change.

The impetus for eliminating the commuter tax in 1999 came from both Democratic and Republican leaders in Albany who wanted the upper hand in a special election. Both sides saw the repeal as a way to woo suburban voters. Albany rolled over New York City and raw politics triumphed over sound fiscal policy. Democratic Speaker of the Assembly Sheldon Silver who represents lower Manhattan played a shortsighted political game and voted to repeal the commuter tax, an act that benefited only upstate voters.

What makes the repeal especially galling to many New Yorkers is that it underscores the state government's general disregard for the city.

New York City already carries a unique burden in paying for Medicaid and public assistance costs, which now exceed more than $3.5 billion a year. In much of the rest of the nation, the state government funds these items almost exclusively. Similarly, state education aid has historically denied the city its fair share based on the number of children enrolled in schools. Another recent blow to the city budget was last year's repeal of a $114 million state payment that over more than two decades had made up for revenues lost when the city's stock transfer tax was eliminated.

It is no wonder that this anti-city, nonpartisan heavy handedness in Albany has finally prompted a political response in New York City.


Beyond the historical and political arguments for restoration of the commuter tax is the argument that the fiscal costs to New York City of providing services to commuters ought to paid for, at least in part, by commuters themselves.

A recent report by two Hunter College economists Howard Chernick and Oleysa Tkacheva estimates that commuters cost the city between 2.2 and 3.8 percent of the city budget, or between $1.2 and $1.9 billion a year. The annual cost to the police force alone is an additional $185 million. The same report found that on average commuters earned 37 percent more than residents. The authors concluded that "the elimination of the commuter tax imposed a significant, and in our view, unfair fiscal burden on the City of New York."

With the New York State Financial Control Board, the agency that oversees the city's fiscal plans, projecting a possible budget deficit of $6 billion in 2006, the restoration of the $500 million commuter makes political and fiscal sense.

In fact, little more than a doubling of the tax to one percent would raise over $1 billion. Commuters would still be paying less than a third of the top personal income rate for residents, and they would be helping stabilize the city's budget that funds the services they use.

Glenn Pasanen, former associate director of City Project, teaches political science at Lehman College of the City University.


For the opposite view, see "The Tax Whose Time Has Gone," by E.J. McMahon


The (Proposed) Trains To The Planes

New York City is one of the few premier international cities without direct rail access to its airports. Mayor Bloomberg wants to fix that. A centerpiece of the mayor's vision for the revival of Lower Manhattan is to build rail connections between Lower Manhattan and John F. Kennedy and Newark Liberty International airports. Bloomberg believes that direct rail access is pivotal to making downtown Manhattan a global center that can compete with the likes of London, Berlin and Hong Kong.

Under Bloomberg's "Vision for Lower Manhattan" the AirTrain elevated guideway system, currently under construction by the Port Authority, would be extended from Jamaica, Queens through a new tunnel to Lower Manhattan. Under current plans, AirTrain will connect JFK terminals with each other, airport parking lots, the Howard Beach subway station and subway and Long Island Rail Road train lines in Jamaica, Queens. AirTrain's opening, scheduled for this year, has been delayed by an accident last summer that killed one worker. Extending AirTrain from Jamaica to lower Manhattan would provide air travelers with a one-seat ride (i.e., no need to transfer) from the airport to downtown, and would also connect Lower Manhattan to LIRR trains in Jamaica.

Bloomberg also proposes to extend the PATH train from Newark's Penn Station to Newark Liberty airport. This extension would provide direct rail service from Newark to a new PATH station at the World Trade Center site as well as PATH stations as far uptown as 33 Street.

Bloomberg estimates that the AirTrain extension would cost $3.7 billion and take nine years to complete. The Newark PATH extension would cost $775 million and presumably could be built more quickly than the AirTrain tunnel.

Bloomberg says that a one-seat ride between JFK and Lower Manhattan "is key to our success." The concept of a one-seat ride is attractive for many reasons. It offers faster and more reliable travel times by eliminating transfers between trains. It also offers greater convenience, especially for air travelers lugging bags. The simplicity of direct rail service also contributes to the image of a city as an easy place to visit and do business.

On the other hand, spending nearly $4 billion for a one-seat ride from JFK to Lower Manhattan offers few benefits to the much larger number of travelers originating in or bound for other parts of New York City. Air travelers using JFK come from locations throughout the metropolitan area. Although it requires the transfer in Jamaica or Howard Beach, AirTrain will let travelers reach JFK by rail from throughout the city via the subway connections and from throughout the LIRR service territory via the Jamaica LIRR connection.

In his Lower Manhattan speech, Bloomberg cited Heathrow airport's 30 minute transit access to Paddington Station in London's West End, alluding to the high-speed Heathrow Express service. What he did not point out, however, is that ridership is higher on the Piccadilly Underground line from Heathrow than on the faster Heathrow Express service, according to the 2000 Transit Cooperative Research Report, Improving Public Transportation Access to Large Airports. The Piccadilly line is slower but it serves a larger geographic area. It is also cheaper,another advantage that is particularly important to airport employees, who far outnumber air travelers at major airports such as JFK.

In comparing New York with other international cities, the mayor also raises the question of whether as many travelers can be attracted to public transportation at American airports as at airports in Europe and Asia. Rail serves 25 percent of air travelers using Heathrow Airport in London, 35 percent of travelers at Tokyo's Narita Airport, 25 percent in Hong Kong and 20 percent in Paris (DeGaulle). A substantial additional fraction of travelers take buses to the airport, ­ 15 percent in the case of Heathrow.

American cities with direct rail access have attracted much lower levels of transit ridership. The best case is Reagan National airport outside Washington, DC, where 15 percent of air travelers use the excellent Washington Metro trains. Virtually all of these travelers are domestic travelers, many of them traveling on business and going to offices or hotels close to a Metro station. The walk from the terminal to Metro is very short, Metro service is frequent and the fare is relatively cheap.

Rail's share of airport travel is much lower in other U.S. cities. Direct subway service between downtown business districts and the airport draws 12 percent of air travelers for Boston's Logan airport, eight percent for Atlanta's Hartsfield airport, eight percent for Chicago's Midway airport and four percent for O'Hare.

According to an update (in pdf format) to the Improving Public Transportation Access to Large Airports report, about four percent of air travelers from JFK use the bus to A train connection. International leisure travelers are most likely to use the A train and are easily spotted with backpacks by anyone who has traveled through Howard Beach. Despite this low ridership level, the A train carries a substantial and growing JFK ridership. About 900,000 people used the Howard Beach station entrance that connects to shuttle buses in 2001, a 125 percent increase from a decade earlier. Many of these riders are airport employees.

In many ways more promising than the expensive JFK direct rail link is the mayor's proposal to connect PATH to Newark airport. It is not clear from the mayor's speech whether he has in mind connecting PATH to Newark's AirTrain system or extending PATH trains directly to airport terminals. The Port Authority has been looking at the first option, however, which seems the more likely option although here again, it would require travelers to make a transfer between AirTrain and PATH.

Will New Yorkers ever enjoy truly direct rail access from Manhattan to any of the region's three major airports? The coming of AirTrain at JFK and possible extension of PATH to connect with the Newark airport's AirTrain would offer two-seat rail access to travelers who originate or are destined for many locations throughout the metro area. A one-seat ride is a more distant goal. But it may not be a bad thing that it is distant. The two-seat rides take advantage of the region's extensive rail infrastructure which offers access to numerous destinations with frequent and reasonably reliable service. It is not hard to argue that a two-seat ride to where you want to go is better than a one-seat ride to select locations, such as Lower Manhattan, that will serve only a thin slice of the flying public.

Bruce Schaller is Principal of Schaller Consulting, which provides research and analysis to government, business and non-profit groups seeking to identify and meet customer needs in the transportation sector. He is also a Visiting Scholar at the Center for Transportation Policy and Management at New York University.

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