May 11, 2016

Next Stop, Fairness in Fares: Why New York Needs Low-Income Transit Discounts

 By Harold Stolper

Most affluent New Yorkers don’t think twice before ponying up $2.75 to ride the subway or bus. But for the working poor, it’s another story. In the Community Service Society of New York’s most recent “Unheard Third”—an annual survey of the daily experiences of low-income New Yorkers—more than one out of four such New Yorkers reported that they were often unable to afford subway and bus fares. For a single earner at the federal poverty level, the $1,400 needed to cover the cost of a year’s worth of 30-day unlimited MetroCards comes to almost 12 percent of annual income.
The MTA, in its own words, “drives the New York regional economy by opening up countless job opportunities for millions – jobs that are miles from home are easy to get to with our subways, buses, and commuter trains.” Unfortunately, access to jobs is far from “easy” for more than 800,000 working-age riders who live below the poverty line. More than one out of three low-income New Yorkers report that they’ve been unable to look for or take jobs because of transit costs; for low-income Latinos this figures jumps to 43%.
Recent MTA fare policy has only made matters worse. The last round of fare hikes raised the cost of the single-fare tickets disproportionately used by low-income riders by 10 percent. By comparison, fares rose by less than 4% on 30-day unlimited MetroCards favored by moderate- and high-income riders who can afford to buy a month’s worth of travel up-front. And all of this while incomes have been stagnating for the lowest wage-earners.
Subsidized MTA transit fares are nothing new; seniors and people with disabilities already qualify for half-price rides. The City also requires many employers to offer employees tax deductions for qualified commuting expenses, including transit and parking, which benefits predominantly middle- and upper-income families. In short, none of the existing transit subsidies are well-targeted to low-income families. Shouldn’t we also offer discounts to those who need them most?
Other large cities—including Seattle, San Francisco, and London—have already introduced low-income transit fare discounts. The details of these programs differ in some respects, but their aim is the same: helping those who are struggling to afford public transit and as a result are cut off from jobs and opportunities to get ahead. One relatively simple proposal would be to offer half-price fares for New Yorkers with incomes below the federal poverty level. This would put up to $700 a year back into the pockets of the working poor. That’s $700 towards rent, medical expenses, education and training, and all of the things poor families need to get by—not to mention get ahead.
How much would this cost? Initial estimates place forgone MTA revenue in the ballpark of $200 million a year. While the MTA operating budget is strained, that $200 million could easily be made up from the healthy current surplus in the City’s budget, and from State revenue sources that don’t burden low-income families. Those State funds could, for example, come from the gas tax (which also has a positive environmental impact by discouraging driving) and fairer tolling on MTA-controlled bridges and tunnels.  
If the State and City can devote significant resources to reducing commuting costs for more affluent families, it can also devote commensurate resources to help the poorest individuals commute to work, attend school, and get medical care. The turnstile should be the entry point—not the barrier—to upward mobility.
Harold Stolper is the senior labor economist with the Community Service Society of New York. With CSS vice-president Nancy Rankin he is co-author of CSS’s recent report on the burden of transit fares on low-income New Yorkers, which proposes a reduced-fare proposal to ease that burden, entitled “The Transit Affordability Crisis: How Reduced MTA Fares Can Help Low-Income New Yorkers Get Ahead.”
Photo by Jeff Jones