Testimony: The Economic Incentive for Expanding Fair Fares
David R. Jones
Before the NY City Council Committee on Transportation and Infrastructure
Thank you for providing this opportunity to testify today during the Council’s Preliminary Budget Hearings. I am David Jones, President and CEO of Community Service Society of New York (CSS). Through research, advocacy and comprehensive direct services, CSS promotes economic mobility for New York’s lowest-income residents, leading to a more equitable city and state.
My testimony today will focus on the city’s Fair Fares transit discount program, which offers half-priced bus and subway fares to low-income residents with household incomes at or below the federal poverty level (FPL).
Since its inception in January 2019, Fair Fares has provided a lifeline to New Yorkers struggling with transit affordability. According to our Unheard Third survey, one in four low-income New York City residents say they often struggle with the cost of transit. As we emerge from the COVID pandemic, transit affordability remains a formidable challenge for many low-income New Yorkers, particularly for many of the city’s Latino residents and among households in the Bronx – where the poverty rate is highest across the city.
Yesterday, I was at the Justice Sonya Sotomayer Community Center in the Soundview section of the Bronx to hear Speaker Adrienne Adams’ `State of the City’ address. In her remarks, the Speaker called for increasing the income eligibility threshold for enrollment in the Fair Fares program, from the current 100 percent of the federal poverty level to 200 percent of poverty.
Just over a year ago, the Speaker and Mayor Adams announced an agreement to baseline funding for Fair Fares in the city’s budget. It represented a commitment by the city’s two top elected leaders to a program that was critical to achieving transit equity and supporting the city’s efforts to create an inclusive recovery from the twin impacts of the recession and pandemic.
With her announcement yesterday, the Speaker acknowledged what we have all come to understand -- that the city is failing to tap the full potential of Fair Fares. That’s because the current Fair Fares cut-off is too low and leaves out too many New Yorkers who still struggle every day to afford the fare.
Today, approximately 280,000 New Yorkers are enrolled in Fair Fares, about a third of the eligible population. Fair Fares’ modest enrollment numbers can be tied to lack of awareness. Many of those eligible for the program simply haven't heard of it. In fact, our Unheard survey found that about half of the eligible population -- 932,000 -- said they had not applied for the program, with another 14 percent reporting they did not know how to apply.
More robust publicizing of the program is sorely needed. But in addition to raising visibility of the program, the city should indeed expand program eligibility.
Compared to other transit agencies with discount fare programs, New York City has one of the most restrictive. According to data compiled by the Journal of the Transportation Research Board, nine of the nation’s 14 largest transit agencies require recipients who receive fare discounts to have incomes between 125 and 200 percent of poverty. That includes the BART system in San Francisco and Kings County Metro which serves the greater Seattle, Washington area.
Still other cities have gone further by establishing fare-free public transit programs to increase equity in underserved communities. Among them Boston, Denver and Kansas City.
Of course, none of these systems approach the scale of New York City’s. Nevertheless, we need to find ways to keep transit fares affordable for all New Yorkers, particularly low-income individuals and families on tight budgets.
Many New Yorkers with incomes just above the poverty level are working multiple jobs and can be pushed into poverty by even the smallest, unexpected expense like a visit to the emergency room or a malfunctioning appliance.
Consider this: for a family of four, the official poverty level is $26,550. However, for a mother and two children it's only $23,030, and for a single New Yorker it's an unimaginable $13,590. A more realistic measure of economic need in New York City should be at least twice the federal poverty level.
The bottom line is the official poverty level--which is the same nationwide, in rural Alabama as in New York City-- excludes many New Yorkers who earn a little more, but are still struggling to get to work, medical appointments and school for themselves or their kids.
Above all else, there is an economic incentive to expanding eligibility for Fair Fares transit discounts: it would provide targeted assistance to a group of working-class New Yorkers who rely almost exclusively on public transit. We’re talking about home health care workers, laborers, food service and restaurant workers – the very people who help make this city run.
Opening up enrollment to more working-class New Yorkers would boost MTA farebox revenues at a time when the transit authority is strapped for funds and is looking for ways to close a $600 million deficit. Based on a CSS analysis of data available from the Census Bureau, roughly 1.7 million working age New Yorkers would qualify for Fair Fares at 200 percent of poverty. Of that number, 45 percent or around 772,000 are likely to be regular bus and subway commuters.
As for the cost, we estimate that expansion of the program would add approximately $142 million to annual operating expenses, which represents a rounding error in the city’s $102 billion budget. That seems like a reasonable investment of taxpayer dollars to spread the economic benefits of the program to more New Yorkers.
When we first imagined Fair Fares -- working with our partners at Riders Alliance and building a diverse coalition of elected officials, faith leaders, advocates and anti-poverty organizations -- we started cautiously. But today, we know the actual program cost and utilization patterns. All of this tells us that we can afford to expand the program to more of those in need. And we should.
To manage the costs of expansion, the city could phase it in similar to the way Fair Fares was initially rolled out by the previous administration. As ridership increased, the city could adjust funding to meet the need.
In conclusion, the Community Service Society applauds Speaker Adams for her proposal to expand income eligibility for Fair Fares. We are confident the City Council, which was the force behind the establishment of Fair Fares in 2019, will support the Speaker’s proposal. And we are hopeful that Mayor Adams, who has described Fair Fares as “transformative” and was an early supporter of the program, will back expansion because it will help the very working-class New Yorkers he pledged to fight for as a candidate.
Thank you.