As Walder Leaves, Fare Hikes Announced
Many at the Metropolitan Transit Authority were surprised last week when Chairman Jay Walder announced that he would be stepping down only two years into his tenure to run Hong Kong’s subway system. It’s still uncertain who will replace him at the helm, but more change is already on the horizon.
In a financial plan released on Wednesday, the MTA announced two 7.5 percent fare hikes, one set to take effect in 2013, while the other would occur in 2015. The authority did not explain whether monthly unlimited Metrocards or the cost of a single ride would rise, though that is what most people expect. On the bright side, additional revenue brought in by the fare hikes will allow the MTA to avoid service cuts, though the blueprint makes several assumptions to reach that conclusion, including that union workers will agree to forgo pay raises for the next three years.
Walder managed to balance the transit system’s budget during his time there, but that caused a great deal of pain for MTA employees and riders as thousands were laid off, entire train lines were eliminated, and prices climbed. Just last December, the cost of a single ride Metrocard jumped 25 cents and the charge for a monthly unlimited card went from $89 to $104.
The plan has been accompanied by other attempts to help the MTA take in more money. On Tuesday, the authority’s board approved a measure that, beginning in 2012, would levy a one dollar penalty on a person who chose to buy a new Metrocard rather than refill an old one.
Yet, with fare hikes, fewer employees and new fees, the authority will be in the red again by 2014, when it is expected to run a $54 million deficit, and the following year, when that amount is supposed to balloon to $178 million. This will happen because the authority will have to borrow $7 billion over the next five years to fund capital projects, adding to the $31 billion in debt that it currently must service.