Then came those extra bonuses with free bus transfers…
By Joe Palumbo
Queens has no exclusive on the New York City subway system, but there is certainly a lot of aboveground and underground track in Queens. It’s been quite rosy with fares holding steady since 1995.
Then came those extra bonuses with free bus transfers that made two-zone fares into one-zone fares. And if that’s not enough, if you bought a $15 transit card you got one free ride. But times have changed.
With the big hit in the economy, the Metropolitan Transportation Authority said it needed more money to continue to run the show. This led to the biggest fare increase in history. There is a group fighting it on the contention that the MTA was not clean in reporting the state of its finances.
The Straphangers Campaign argument comes with the allegation by state Comptroller Alan Hevesi that the MTA had an $83 million surplus in its 2003 budget but was claiming a $236 million deficit. The MTA refuted the charge and said that its accountants, Deloitte & Touche, had signed off on its books.
The straphangers group requested Supreme Court Justice Louis York to declare the increase improper. But let’s look at the business of the MTA. According to the books, the MTA has an annual $7 billion budget. That’s quite a lot of bucks.
There are seven million subway riders. At the old rate, each of them spends $3 dollars a day. That comes to a cool $21 million a day. Doing some arithmetic, we have $630 million a month, or $7.5 billion a year. It would be fair to discount this figure with lower weekend traffic volume and the purchase of discounted tickets.
But on the same token, doesn’t the MTA receive a large chunk of the tunnel and bridge tolls (recently increased by more than 14 percent)? That is no cheap change. The present fare increase means an additional 33 percent cash infusion to the MTA budget.
There are many Wall Street blue-chip companies that would jump for joy to have such a cash flow. Perhaps that is precisely what is needed.
Former Mayor Rudolph Giuliani proposed privatizing the airports. Perhaps our transit authority should do the same. Then it would run like the business it should be and not run as just one of the many municipal bureaucracies.
So how’s business at the MTA? When it comes to business efficiency, the MTA is not going your way.
Joe Palumbo is the fund manager for The Palco Group, Inc. and can be reached at palcogroup@aol.com or 718-461-8317.
