Should an unemployed 19-year-old taking the T to a job interview in downtown Boston pay the same fare as someone heading to work at a hedge fund?
It’s a question that has been on the mind of Transportation Secretary Stephanie Pollack for a while, and one she’s ready to tackle. The MBTA charges some of the lowest fares in the country, set largely to accommodate those who can least afford it.
Pollack would like to turn the fare structure on its head, by raising prices to where the state can properly maintain and invest in transit, then offer discounts to low-income riders.
“Our prices are being artificially lowered because we are trying to be socially equitable,” said Pollack. “While the instinct to be socially equitable is the right instinct, the way to do it is not to starve the system of revenue.”
It’s a bold move for a Republican administration to understand how across-the-board fare increases would amount to a regressive tax on the working poor — and then try to do something about it. It’s part of the fresh thinking that Charlie Baker is trying to bring to Beacon Hill. Remember, he’s also the one proposing to phase out the film tax credit so the state can help low-income workers instead of Hollywood stars.
The MBTA currently offers discounts to seniors, students, and people with disabilities. But if you make $20,000, you pay the same as someone earning $100,000. Boston has one of the country’s widest gaps between the rich and poor, and you start to wonder why we haven’t thought about the fare structure sooner.
Take a look at the income breakdown of some of the ridership: About 17 percent of subway riders come from households with incomes of $30,000 or less, while 31 percent are in households making more than $100,000. On the commuter rail, 54 percent are from families that bring home more than $100,000, compared with about 4 percent from household incomes of less than $30,000.
“We have riders who can afford higher prices and would gladly pay them if it meant they got better service,” Pollack said.
That’s a rather cavalier statement after the meltdown of the T this winter, one in which the system performed so poorly that it will offer a free fare day next week as a good-will gesture. But Pollack remains confident, pointing out how the T didn’t lose riders when it raised fares last year by 10 cents, to $1.60 for the bus on a CharlieCard and $2.10 for the subway.
Any further price increases for the T would be subject to testing, analysis, and political will to figure out the right combination of daily fares, monthly passes, and needs-based discounts that can produce enough revenue to improve service while protecting lower-income riders. The MBTA has two pilots underway, and it will probably be another year or so until a formal plan is put together.
State law limits fare increases to once every two years and to no more than 5 percent; the next time prices can be upped is in 2016. Raising and restructuring fares was among the recommendations issued last week by the governor’s T panel.
The panel advised the Legislature to lift restrictions on fares to enable the T to raise more revenue. Fares cover 39 percent of the T’s operating budget, the commission said, while in Chicago and New York, fares are closer to half of their operating budgets.
While the specter of higher fares is worrying transit advocates concerned about low-income riders, Pollack made it clear the report called for an increase in “fare revenues,” not fares. The distinction in her mind is that the MBTA doesn’t have to impose one-size-fits-all hikes as it always has.
“If I didn’t believe that, I would have tried to dissuade the panel from making that recommendation,” she said.
‘We have riders who can afford higher prices and would gladly pay them if it meant they got better service.’
So which T riders qualify for an income-based discount?
The MBTA would work with state agencies that already administer benefits to those on limited incomes, such as those who qualify for subsidized health care or food stamps. People enrolled in those programs could be eligible for reduced fares. The T is testing such needs-based fares with a youth pass for 19- to 21-year-olds, as well as with those who use the Ride, a transit service for people with disabilities. The youth pass provides a 50 percent discount, and eligible Ride customers get $1 off fares.
That fare structure is modeled partly after a program that Seattle rolled out last month, offering steep discounts across its regional transit system for low-income riders. The King County Metro system, which includes bus and light rail, raised fares by about 25 cents on March 1, but riders of limited means now get almost as much as 50 percent off fares.
Unlike the T, King County does not have flat rate fares; it charges more during rush hour, for example. A single-zone bus ride during peak time costs $2.75, while the discounted fare for low-income riders is $1.50 all the time.
Seattle transit officials rely on other agencies that work with those on limited incomes to determine who’s eligible. These riders are issued a pass good for two years. King County Metro estimates that 45,000 to 100,000 riders could benefit from the program.
As with everything with the T, transit advocates and legislators are wary, especially when it comes to raising fares. Not everyone is convinced our prices are too low; other networks charge more because they offer more — either longer hours and expanded service.
Tom McGee, the Senate chairman of the Joint Committee on Transportation, said he and other legislators are still digesting what’s in the governor’s MBTA report. He’s got a lot of questions on the data and what’s driving costs up before talking about restructuring fares.
“It’s too early to say what direction we will go in,” McGee said.
It’s a rather cautious response. Pollack’s bold idea deserves much more than that.