Testimony - Fair Fares

Testimony by Nancy Rankin, VP for Policy Research and Advocacy

Before the New York City Council Committee on General Welfare
New York City Council Fiscal Year 2019 Preliminary Budget Hearing
March 27, 2018


Thank you for the opportunity to testify today.

My name is Nancy Rankin. I am Vice President for Policy Research and Advocacy for the Community Service Society of New York, a nonprofit organization that works to advance upward mobility for low-income New Yorkers. 

I am here today speaking on behalf of 65 economic justice, labor, transit, women’s rights, legal and faith groups that have joined together to urge the City to provide half-price discounts on bus and subway fares for the poor, like we already do for seniors and the disabled. Our proposal is known as Fair Fares.

And I am here today speaking on behalf of 800,000 working age New Yorkers who are struggling to get ahead on incomes that leave them below the federal poverty threshold of $24,858 for a family of four. They rely on buses and subways to get to work, commute to college, get needed medical care, pick up their kids, and come home to their families after a long day. But too many cannot afford the MetroCard that is their ticket to literal and economic mobility.  

These New Yorkers are looking to the Council for urgently needed relief.  We thank Chairman Levin and the majority of Council Members for their letter to the Speaker, released yesterday, advocating for including funds for Fair Fares in the Council’s response to the Mayor’s preliminary budget. 

While Mayor de Blasio has embraced half-fare discounts for low-income New Yorkers, he has proposed paying for it through an increase in the millionaires’ tax. But why make Fair Fares—one of the few important things New York City has the legal authority to do on its own, without Albany’s approval—contingent on getting the state to pass a tax increase that virtually everyone but the mayor acknowledges has little chance of being enacted?

Moreover, tying specific programs or services to a dedicated revenue stream is often bad public policy. A specific tax or fee is unlikely to generate precisely the right amount of funds needed for a given purpose.  The revenue will fluctuate from year to year, producing either too much or too little in needed resources, so the government will be forced to add other funding or violate the promise of what the tax or fee was supposed to be used for.  Since dollars are fungible, often these dedicated revenues amount to smoke and mirrors, simply allowing the government to shift funds it otherwise would have spent to something else.

It’s far better public policy to raise revenues through equitable, progressive means, and then spend our resources based on our priorities as public needs change.

Most city initiatives—from ThriveNYC to affordable housing to adding police officers—are paid for out of growing city revenues or by finding savings elsewhere in the budget.  We don’t require a dedicated new funding stream to pay for them.  Surely in a proposed budget of $88.67 billion we can find $200 million to reduce economic inequality by making public transit more affordable?

These costs will be partly offset by significant savings.  The City’s Human Resources Administration currently spends upwards of $48 million providing limited use free MetroCards to public assistance recipients to enable them to travel to certain appointments. But such ad hoc cards do little to meet the broader transportation needs of the poor.

In addition, aggressive turnstile policing combined with unaffordable fares amounts to criminalizing poverty. Brooklyn Defender Services estimates that in 2015, we spent about $51 million on fare evasion prosecutions. Rather than punish people for being poor with arrests and fines they cannot pay, why not make it easier for them to afford public transit? Fair Fares is a better use of our resources. 

Fair Fares is not a subsidy for the MTA.  It is a subsidy for low-income New Yorkers.

It would save poor New York City transit riders $726 annually off the cost of 12 monthly passes.  That would make a real difference in their lives. It would be one of the most effective ways of reaching all the city’s poorest.  Unlike the Earned Income Tax Credit (EITC), for example, benefits would go to workers whose employers pay them off-the-books, the unemployed trying to find jobs, homeless Veterans and many who are hustling hard to make ends meet cleaning houses, walking the streets with a bucket and sponge to wash shop windows, or working at other jobs that don’t provide a regular, official paycheck. New York City’s own poverty measure, which differs from the official federal poverty rate by taking into account non-cash income supports and deducting nondiscretionary expenditures, shows that commuting costs raise the city’s poverty rate by two percentage points, nearly as much as payroll taxes and more than the impact of child care costs.

How can we argue that the city should not subsidize fares for the poor, when we currently subsidize fares for seniors, the disabled and students and forego tax revenue by providing pre-tax commuter benefits targeted to higher earners?

In his State of the City Message just last month, Mayor de Blasio proclaimed his goal of making New York City the “Fairest Big City in America”. Mr. Mayor we agree. But lofty rhetoric alone will not lift up low-income New Yorkers. We urge the Council to include funding to make half-fare on public transit a reality for low-income New Yorkers in its budget response and a priority in the final budget negotiations. 

Thank you.

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Community Service Society of New York is a registered 501(c)3.  EIN: 13-5562202