This is an assignment that I completed for graduate course PAD 771 (Capstone).

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Date: 11/16/2015
To: NYS Assemblyman Jeffrey Dinowitz
From: #12336G, Policy Analyst
Re: Mandating Reduced Transit Fares for Low Income Residents
The purpose of this memorandum is to address the inaccessibility of public transit that the
current fare structure creates for low-income residents of New York City. This is particularly
important as having viable transportation options plays a key role in fostering upward mobility
(Mayer and Marcantonio, 2005). Within the city’s five boroughs, transit services are facilitated
by New York City Transit Authority (NYCTA), a subsidiary of the Metropolitan Transportation
Authority (MTA).
In March 2015, the Community Service Society released a report titled “Rising Fares at the
Turnstile- The entry is becoming the barrier to economic mobility for low income New
Yorkers.” In essence, the report offers a quantified analysis of the parallels between the city’s
public transit inequity and increasing income inequality.
As a Policy Analyst, I will examine how state transportation policy can be amended so that New
York City’s low income residents have greater economic access to public transit services.
Though we are looking at changing how the public transit fare structure affects city residents,
legislation at the state level is required in order for any revision to be implemented, as the MTA
is governed by state law. The related provision, NY Public Authorities Law, Section 1205,
outlines the authority of NYCTA and the city’s Mayor in the administering and/or revision of
fare rates for city public transit services.
This analysis will consist of a five-point review. First, there is a problem assessment detailing the
issue and a literature review noting current information on the subject. Next is an analysis of
stakeholders that outlines authority figures with legal jurisdiction in this area, a review of policy
alternatives and a recommendation of an amendment to state transportation policy.
Assessment of the Problem
Historically, public transit fares in the city have remained consistent with wages. Up until the
mid 2000s, rate increases were sporadic at best. Even as the hikes were becoming more
consistent, fares didn’t start to veer off into unaffordability until 2008. Up until that point, the
price seemed to be more in tune with the city’s economy.
Consider that in 2005, the price of 30-day cards rose from $70 to $76. Naturally, there’s an
argument that any increase at any time is burdensome and for a sizeable amount of low income
residents, this is true. However, examining this increase within the dual context of the city’s low
unemployment rate at the time and the average income jump in the two years since the prior fare
increase makes the hike seem less egregious.
One month after this increase was implemented, Department of Labor Records put the city’s
unemployment rate at 5.3 % and public and private sector jobs had increased .7 and .9 percent
from the previous twelve months. Similarly, that year, average yearly income had risen by five

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thousand dollars from the previous twenty-four months (Income Inequality in New York City,
2012).
In contrast, consider the hikes implemented in 2009. Said hikes raised the fare for a single ride
from two dollars to two dollars and twenty-five cents while stabilizing the price of the 30-day
card at eighty-one dollars, a rate set in the previous year’s five-dollar increase. Surely, a twenty-
five cent or even five-dollar increase may not seem like much but again, this fare inflation must
be examined holistically. The city, much like the rest of the nation, was weathering the effects of
an unprecedented recessionary period.
In June 2009, the introductory stage of the imposed hike, the city’s unemployment rate was an
unsettling 9.5 percent. Similarly, the city’s average income dropped by three thousand dollars
from twenty-four months prior. It is around this period where the claim for inequity begins to
gain momentum. Six years after the deepest stage of the recession, there have been three
subsequent increases. The current fares are listed below in Table 1.
Table 1- MTA New York City Transit Fares as of March 2015
Note: $1 fee applies to each new Metro Card purchase.
Though the merit of the agency’s fare increases is often a point of debate, their approach for
calculating an average fare is admittedly strategic. While the degree to which this average figure
factors into actual fare consideration is unclear, it does offer some insight into the sophistication
of their methodologies. Essentially, it detracts validity from a common critique that paints the
agency’s decision making as frivolous.

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First, the total number of bus boardings and subway system entries is computed. This figure is
inclusive of both local buses and express buses to Manhattan. Next, that number is divided by
total subway and bus fare revenue collected. The revenue is inclusive of cash fares collected
from buses, fares gathered from express buses, and reduced senior/disabled fares though the
latter two comprise a small portion of total trips. Excluded from both the revenue and trip counts
are the use of student Metro Cards and employee transit passes. In summary, the average fare is
predominately based on regular subway and local bus fares (R. Lowenstein, personal
communication, August 27th
, 2013). However, the most straightforward insight into fare hikes
comes from Chief Financial Officer Robert Foran. A few years back, while discussing
forthcoming fare increases, he asserted to board members that future hikes are contingent upon
the agency’s finances at the time (MTA Plans Fare Hikes Over Next 4 Years, 2013).
In 2014, an inability to afford subway and bus fares was noted as the biggest hardship among the
city’s poor residents. With 33% of those surveyed reporting the issue, this hardship was more
prevalent than threatened foreclosure/eviction and postponed medical care/surgery combined
(Community Services Society, 2015). Additionally, while earnings for the city’s low income
households have remained stagnant, transit fares have continued increasing.
As the majority of those displaced by the current fare structure are Black and Latino, a racial
divide among ridership is created. Divides of this sort fail to contribute to the image that the city
and by extension, the state aims to present in attracting visitors and new residents. Said image is
as a mecca of diversity and purveyor of social equity. When 42% of Blacks have been unable to
afford transit fare at some point in the proceeding 12 months compared to 26% of Whites and
such is the case for 35% of Latinos compared to 16% of Asians, the existence of a disparity
becomes clear. Also worth noting is the fact that low income Blacks and Latinos are more likely
than low income New Yorkers as a whole to rely on public transit to get to work (Community
Services Society, 2015).
In analyses of public transit’s success or failure, fare box recovery ratio is often cited as a
contributing factor. A ratio that is high is looked at as a reason for why the service is meeting
goals and vice versa. NYCTA relies heavily on revenues generated from passenger fares. Their
fare box recovery ratio is higher than cities with similarly equipped public transit systems. This
ratio, computed by dividing passenger fare revenue by operating expenses, is 58% in New York
City compared to 44% in Chicago, 38% in Boston and 36% in Philadelphia (Community
Services Society, 2015). This reliance on rider fares to cover operation expenses must be
examined as a reason for the lack of a fare structure for low income residents.
For further assessment of the problem, we look to the number of arrests for fare evasion. Gone
are the days of this being a mere youthful indiscretion. In fact, of the more than 640 people
sentenced for fare non payment in the first half of 2014, only 75 were minors. Arrest figures for
this offense have continued to grow in recent years, as shown in Table 2. One managing director
at the Bronx Defenders, a criminal defense non-profit, suggests that indigence is at the root of the
problem. She states “The reason for turnstile jumping is always the same, poverty. Our clients
are simply people who are trying to get home, to school, to work, to see their loved ones but
don’t have the ability to pay.” (Paddock and Ryley, 2014).

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Table 2- Arrests in Subway Where Farebeating Was the Top Offense
During peak travel hours, the number 3 train makes 34 stops through 2 boroughs. Examining the
income variations among these 34 stops lends more credence to the push for a reduced fare
structure. The average income for the census tract covering the Park Place stop in Manhattan is
slightly over $205,000. Meanwhile, the average income for the census tract covering the
Pennsylvania Avenue stop in Brooklyn is slightly over $25,000 (Buchanan, 2013). A basic
understanding of mathematics tells that paying $2.75 for a bus or subway ride will affect the
Pennsylvania Avenue residents differently than the Park Place residents.
Literature Review
The idea of reduced fare structures for low income riders is a fairly antiquated theory. In fact,
some semblance of it is traceable as far back as 1973 (Frankena). Though the concept itself is
nothing new, its practical application is embryonic at best (Johnson, 2015). If public transit is in
fact meant to serve as a “government aid program to help poor people who lack cars” as noted by
reporter Joseph Stromberg (2015), questions as to why this concept has yet to see mass
application certainly arise.
NYC Public Advocate Letitia James, in her role as a “direct link between New Yorkers and their
government” (About, 2014) insists that residents should never have to chose between going to a
job interview or putting food on the table (Donahue, 2015). In an impassioned op-ed, Jones and
Rankin offer an expansion on those sentiments. They question one’s likelihood of getting ahead
when transit prices make commuting to a job or even to stores selling discount items challenging
(2014).
Paddock and Ryley take the analytical route in a NY Daily News article, drawing parallels
between fare evasion and the unaffordability of public transit (2014). In their report, The

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Community Service Society take a similar approach, pinpointing the current fare structure as a
contributor to the growing divide between the city’s haves and have-nots.
Some of the non-local literature, including scholarly work, explores themes touched on in the
local literature, but with more specificity applied. For instance, take the work of Weisbrod,
Cutier and Duncan. Though not scholarly, their report touches on how effective public transit
service resonates with mobility, as noted by Donahue (2015) and Jones and Rankin (2014).
However, this acknowledgment of the greater mobility and market access provided by effective
transit systems is offered within an economical context complete with references to industry
terms like spatial agglomeration. The term refers to the gain in business productivity from
operating in an area comprised of comparable or additive activities. Weisbroad and his co-
authors pinpoint public transit as an enabler of this type of economy (2014).
Additionally, inadequate access to employment (i.e. minimal transportation linkages between
worker and employer) is a common precursor to welfare dependence (Wachs and Taylor, 1998)
while vehicles are in fact critical in ensuring access to low skill and low wage labor (Taylor and
Ong, 1995). Hughes provides perhaps the most ambitious literature, conceding that the mobility
approach, one which involves the removal of transportation barriers like high transit fares, is a
step toward alleviating poverty (1995).
Other cities have implemented reduced fare programs for low income residents. The most recent
and perhaps the most notable case has occurred in Seattle. The ORCA Lift Program reduces fare
up to 50% for residents whose income is less than 200% of the federal poverty line (Johnson,
2015). Similarly, Madison, Wisconsin reduces fare for residents whose income is at or below
150% of the federal poverty line. Small to mid-sized cities like Charleston, South Carolina are
also involved in these efforts. The city grants low income riders a 43% reduction in fare,
providing $1 rides in addition to the regular $1.75 fare (Jones and Rankin, 2014).
Additionally, cities like Boston are reviewing how to implement transit fares that operate on a
sliding scale, increasing or decreasing based on individual rider income (Leung, 2015). In
cumulatively reviewing these and other measures, our office will find the most effective way to
modify this issue and the current policy that governs it.
Stakeholder Analysis
In examining this need for a fare structure for low income transit riders, five stakeholders
emerge, all of whom establish clear point of views on the matter First, there is New York City
Mayor Bill De Blasio. His office’s stance that “fare increases and similarly high fares are not
acceptable to him.” (Fermino and Rivoli, 2015) make his position on the issue clear. Next is New
York City Public Advocate Leticia James’s assertion that “The city relies on public
transportation and yet too often New Yorkers are unable to afford Metro cards.” (Donohue,
2015). Third is David R. Jones, the head of advocacy group, Community Service Society.
Arguably the most impassioned of the group, Jones argues that “post recession job growth in
New York City has been concentrated in low-wage sectors, where workers earn so little that
affording the subway fare has become a daily hardship.” (Jones and Rankin, 2014). Fourth is
New York State Assemblyman Jeffrey Dinowitz. The legislator addresses the unaffordability of

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fares indirectly while referring to the minimal amount of ride transfers currently available to
straphangers. He notes, “Essentially, the MTA is charging double fares to riders who have plenty
of trouble paying for one fare as it is.” (2015). Fifth is the MTA Board. Likely the most neutral
of the stakeholders, their lack of investment in this issue is best summed up by Chief Financial
Officer Robert Foran. Specifically, it is his aforementioned assertion that the imposing of fare
hikes is contingent upon the agency’s finances at the time (MTA Plans Fare Hikes Over Next 4
Years, 2013).
As noted in the above table, only Mayor Bill De Blasio and Assemblyman Jeffrey Dinowitz can
mandate the implementation of a reduced fare structure for low income residents. The scope of
Stakeholder Analysis
Stakeholder Bill
DeBlasio
Leticia James David R.
Jones
Jeffrey Dinowitz MTA
Board
Description/Position Mayor Public Advocate C.E.O. of
CSS
NYS Assemblyman Decides
Fare
Structures
Source of Influence NY Public
Authorities
Law 1205
Can bring
litigation against
city and NYCTA
on grounds of
inequality
Members Initiates/implements
state legislation
Members
Explanation of the
Problem
High fares
are not
acceptable
The need for
public transit is
too great for the
fare to be so high
Affording
subway fare
has become
a daily
hardship
The fare rate is one
of several ways that
low income riders
are shortchanged.
Fare rates
and
similarly
increases
are based on
the agency’s
economy
Perception of Crisis Yes Yes Yes Yes Neutral
Proximity to Problem Close Close Close Far Far
Ability to Fix
Problem
Yes (NY
Public
Auth. Law
1205)
No, has no
authority to
implement/modify
legislation
Increase
advocacy
efforts to
persuade
state
legislators
Yes, he has the
authority to modify
legislation (NY
Pub. Auth. Law
1205)
Can vote for
reduced
fares and
against
increases
Ends Desired City-wide
reduced
fare
structure
City-wide reduced
fare structure
City-wide
reduced
fare
structure
More transfer
options for riders
and city wide
reduced fares
Reduced
fare
structure
only if city
accepts cost
burden
Definition/Measure
of Success
Increased
frequency
of
ridership
among low
income
residents.
Increased
frequency of
ridership among
low income
residents.
Increased
frequency
of ridership
among low
income
residents.
Increased frequency
of ridership among
low income
residents.
Increased
frequency
of ridership
among low
income
residents
that
Essential to Solution? Yes No No Yes No

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De Blasio’s authority can be found in the language of NY Public Authorities Law, Section 1205.
This statute allows the city’s mayor to enact a reduced fare structure only if he aggress that the
city will bear the costs associated with doing so. Said costs would include lost revenue to
NYCTA. Assemblyman Dinowitz’s authority lies in his role as a state legislator. Though section
1205 applies to the MTA’s city subsidiary, NYCTA, it is in fact a state statute. Leticia James and
David Jones are indirectly essential to the solution in that they can spearhead efforts that
persuade the mayor and/or Assemblyman Dinowitz to enact a fare structure for low income
residents. While they are not essential to the enactment of reduced fares, their role takes shape in
forthcoming years when proposed fare hikes come into the equation. They can veto or approve
subsequent hikes that any reduced fare structures may be subject to.
Options Specification
The options for policy changes are 1) mandate a reduced fare structure for low income riders that
provides a 50% reduction for residents with income that is less than 200% of the federal poverty
line, 2) mandate a sliding scale of transit fares that is similar to income taxes, i.e. wealthy and
middle income riders pay higher fares than low income riders, 3) do nothing.
Options Expand language in Public
Authorities Law Section 1205
to mandate a reduced fare
structure for low income riders.
Expand language in Public
Authorities Law Section 1205
to mandate a sliding scale of
transit fares that rises with
one’s income.
Do Nothing
Description of Policy
Change
Provides a 50% fare reduction
for low income riders with
income that is less than 200%
of the federal poverty line.
Similar to income taxes, fares
lower or rise based on rider
income.
Fare
structure
remains as it
is.
Implementation
Responsibility
NYC Mayor, NYS Assembly NYS Assembly None
Mechanism of Effect Amend existing Law Amend existing law No change
to existing
law
Cost Administrative and Document
Production, Burden of paying
for this fare structure
Administrative and Document
Production,
Burden of paying for this fare
structure
None
Legal Requirements Changes to NY PAL Section
1205
Changes to NY PAL Section
1205
None
Position of Bill De Blasio In favor In favor Against
Position of Leticia James In favor In favor Against
Position of David R.
Jones
In favor In favor Against
Position of Jeffrey
Dinowitz
In favor In favor Against
Position of MTA Board Open (if agency’s cost burden
is minimal)
Open (if agency’s cost burden
is minimal)
In favor
Degree of Consensus Strong Strong Weak

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The aforementioned policy options are different in their direct and indirect effects on city
residents. Policy #1 has a direct effect on low income residents with income that is less than
200% of the federal poverty line. Indirectly, it affects non low-income residents who may have
to bear the costs burden associated with this mandate. Let us imagine that the Mayor decides
against asserting the authority granted by Section 1205 because he doesn’t want to place the
costs burden on the city. Certainly, state legislators can still decide to order this reduced fare
structure. If the increase in low income ridership doesn’t cover the reduction in fare, then non
low income residents may find themselves paying higher rates to account for the sudden revenue
shortage.
Additionally, a spike in the volume of ridership may cause more wear on the subway system
which will raise maintenance related costs. These maintenance costs may subsequently appear in
the form of raised fares for non low income riders. Public Advocate Leticia James called for the
reinstatement of a commuter tax for those who ride commuter railroads (Long Island Railroad,
Metro North) and work in the city. While this tax may partially or fully pay for the reduction of
fares for low income riders, its failure to gain legislative traction since it was first eliminated in
2009 makes the likelihood of its use a longshot (Donohue, 2015).
In contrast, Policy #2 has a direct effect on both low income and non low income city residents.
An argument can be made for choosing this policy over Policy #1 because it would seem less
likely to create a revenue shortage. While low income riders will be paying less, the presumable
increase in volume of ridership among this group may serve as one absorbent of costs.
An even greater absorbent will be the higher rates being paid by non low income riders, some of
whom are wealthy. Obviously, having a person who makes six figures paying 5 to 6 dollars per
ride as opposed to $2.75 has a more positive effect on the agency’s bottom line. Though this
policy proposed by Boston is still in prep stages and has yet to be implemented (Leung, 2015), it
would seem to be the least alienating among city residents. It would not effect any one group
disproportionately.
Last, Policy #3 would be the least effective. By doing nothing, NYCTA, New York City, New
York State, etc. will be fostering the growth of income inequality and minimizing chances of
upward mobility for city residents of modest means. Unlike the other two options, this would
affect low income residents and no one else.

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Options Assessment
In assessing the policy options, we must look to which one would be the most cost effective and
which one would be the least alienating. In essence, the goal should be to solve one problem
without creating ten new problems in the process.
While policy options 1 and 2 both ensure a high level of effectiveness in addressing the issue,
option 2 offers more equity. It ensures that non low income riders are not hit with higher fares to
cover the revenue dip caused by setting reduced fares low income riders. The concept of paying
based on one’s income epitomizes what equity is all about. It also stands to reason that policy
based on public transit charging everyone what they can afford would cut through partisan lines
more than policy based on reducing the burden of low income folks at the the expense of mid to
high income folks. Conservative critics may argue that the latter is tantamount to welfare.
The most important factors in distinguishing the options are, as previously mentioned; cost
effectiveness and minimal alienation.
Recommendation
Policy #2 would be the best option to implement, as exhibited by the options assessment. The
idea of fares based on income makes the most sense financially. It would negate the inequality
Options Assessment
Options Expand language in Public
Authorities Law Section 1205
to mandate reduced fare for
low income riders.
Expand language in
Public Authorities Law
Section 1205 to mandate a
sliding scale of transit
fares that rises with one’s
income.
Do Nothing.
Description of
policy change
Provides a 50% fare
reduction for low income
riders with income that is less
than 200% of the federal
poverty line.
Similar to income taxes,
fares lower or rise with an
individuals income.
Fare structure remains as
it is.
Political
Feasibility
Moderate High Moderate
Administrative
Feasibility
High High High
Financial
Feasibility
Moderate High High
Equity Moderate High Low
Effectiveness High High Low
Summary
Ranking
12 15 10

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that the current fare structure promotes while also ensuring that middle income riders aren’t
unfairly burdened with higher costs as a result. By having a structure that rises with income, it
makes certain that no rider whether poor, lower middle income, wealthy, etc. is in over their head
when purchasing transit fare. This option is cost effective and as research shows, would not
alienate non low income riders. MBTA Transportation Secretary, Stephanie Pollack proclaims,
“We have riders who can afford higher prices and would gladly pay them.” (Leung, 2015).
Essentially, it is the most equitable of the three options that are presented.
The main argument against this option would be that it evokes remnants of socialism and Robin
Hood economics in which the rich are robbed to give to the poor. While that argument may have
had tractions in the 90’s or even mid 2000’s, it is a new time. Surely, there are still rich people
who fight against being charged relative to their income. On the whole though, more and more
higher income folks seem cognizant and accepting of society’s expectations of them. In fact,
there is a growing legion of wealthy folks who are outspoken about their desire to pay more
taxes (Leung, 2015).

11. 11
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Hughes, A. M. (1995). A Mobility Strategy for Improving Opportunity. Housing Policy Debate,
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Income Inequality in New York City (2012). New York City Comptroller's Office.
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Leung, S. (2015). The Rich Who Say Tax me more. The Boston Globe.
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12. 12
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