The “Invisible Fare” Revealing NYC’s Full Contribution to the MTA

EXECUTIVE SUMMARY

The Metropolitan Transportation Authority (MTA) is at a critical juncture. While ridership is up, underscoring the essential need for public transit in the lives of so many New Yorkers, delays are up as well. The latest Capital Plan is underfunded, and many of the system’s riders can instinctively feel service declining. The challenge is clear: the MTA needs more funding from every level of government to expand and upgrade its operations, keep the system in a state of good repair, and meet the needs of a growing population.

Unfortunately, many discussions about solutions to the MTA’s funding gap have significantly underestimated the City’s financial support to the MTA, with estimates as low as $100 million annually. As shown in this report by Comptroller Scott M. Stringer’s office, the reality is that the City’s contribution – through its riders, drivers, resident and business taxpayers, and the City budget – is far greater than most transit observers are aware of or have acknowledged.

A comprehensive examination of funding provided to the MTA finds that:

• The total operating contribution to the MTA from New York City’s residents and businesses was over $10.1 billion in FY 2014.
• Of that sum, New York City taxes, subsidies from the City’s budget and direct expenditures accounted for $4.8 billion. This effectively creates an “invisible fare” that is the equivalent to $130 per month for every household, even before buying a MetroCard or paying a toll on an MTA crossing.
• Fare and toll receipts from New York City residents in FY 2014 accounted for $5.3 billion, based on a recent survey of regional travel patterns.
• An additional $612.5 million was provided to the MTA through direct City budget expenditures for transit police costs and transit debt service payments from the City budget and the City-created Hudson Yards Infrastructure Corporation.
• The current level of Federal support for the MTA’s 2015-2019 Capital Plan should increase between $1.6 billion to $4.6 billion in order to bring the Federal Government’s contribution in line with past support.
• The City’s total capital commitments to the MTA have averaged $296.3 million per year since 2005, including funds provided by the City for the extension of the #7 subway line to Manhattan’s Far West Side.
• The City’s contribution to the MTA pays for $1.85 billion in transit debt service each year, an amount that is over ten times larger than the amount of debt service support provided by the State.

This report also examines the share of operating revenue collected by the MTA from non-city sources, concluding that New York State’s FY 2014 contribution to the MTA’s operating budget is less than half of what the City contributed in budget subsidies, and only 1/8th of what the City contributes in combined taxes and subsidies, exclusive of fares and tolls. All told, in FY 2014, New York State contributed only $603.5 million in operating revenues to the MTA – about 4 percent of the MTA’s budget. The report also concludes that the New York State counties in the Metropolitan Commuter Transportation District make a disproportionately higher contribution to the MTA budget.

As a final component of analysis, the report examines MTA and New York City Capital Plans dating back to FY 2005, finding that the MTA was only able to achieve an average of 46 percent of its planned capital commitments from the City. Further, the City’s total contribution to the last two MTA Capital Programs has exceeded the New York State contribution by $1.75 billion.

The report recommends that the State increase its operating support to the MTA and that the State and Federal Governments increase their support to the MTA’s 2015-2019 Capital Plan.