• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

NY Mass Transit Fares Will Rise 35% From 2007 To 2015, And Surge From There

Tyler Durden's picture




 

While Bernanke may see deflation here and there, and everywhere, don't tell that to your average NYC commuter (or anyone else for that matter who can't simply expense all non-core activities, such as living and getting around to the taxpayer debit card), who has seen relentless fare hikes by both the MTA and, recently, taxi cabs. But that is only the beginning. While according to a report issued by the State Comptroller Thomas DiNapoli total cost inflation between 2007 and 2015 will hit at least 35%, it is after 2015 that things get really aggressive. According to Reuters, New York's Metropolitan Transportation Authority will need at least $20 billion from 2015 to 2019 to keep its system in good repair, but the mass transit operator has yet to figure out how to pay for these upgrades, a report said on Tuesday. (For those unaware the MTA, the largest U.S. mass transit system, runs New York's buses, subways, commuter railroads and some major bridges and tunnels). As for how the MTA will fund its massive CapEx spending here is the simple answer: it will request, some time in 2015, that then president Barack Obama bail it out, to which he will promptly comply. After all, with total US debt crossing $23 trillion shortly thereafter, who will care about some paltry $20 or even $200 billion (as the number will eventually be revised to).

What was unsaid is that the $20 billion shortfall is merely to fund maintenance capex and spending, and does not cover anything beyond. Where the MTA plans on obtaining the needed capital is simple: debt.

The MTA's current capital plan, which runs from 2010 to 2014, totals $22 billion, an MTA spokesman said. This plan was cut from a proposed $28 billion due to a lack of funding, the report said.

 

In a statement, MTA Chairman Joseph Lhota said the comptroller's report recognized the MTA's significant financial hurdles, cost-cutting measures and "our ongoing efforts to address longer-term challenges, including identifying funding sources for our 2015-2019 Capital Program."

 

The authority is a major issuer in the $3.7 trillion municipal bond market. Its debt outstanding is expected to rise to $40 billion in 2016 from $31.8 billion at the end of 2012, the report said.

 

About 60 percent of the MTA's current capital plan is paid for with debt. If the authority relies on the same share of borrowing for its next capital plan, debt service could hit $4.4 billion by 2024, the report estimated. In 2012, debt service is expected to cost the MTA more than $2 billion.

 

Even with the biennial fare and toll increases that are planned, debt service as a percent of total revenue could rise to 19.8 percent by 2018 from 15.9 percent in 2011. Those are fairly high percentages. New York City, for example, has an informal policy of cutting its capital program when this ratio hits 15 percent, credit analysts say.

What is actually the funniest in the above, is that someone actually believes the system will exist, in its current form, sometime in 2024. Perhaps it is worth point out that at current run rates, the US, which by then will be better known as Japan ver 2.0, will have a little over 200% debt/GDP. As such, discussing such modest sums having a token 9 zeroes, is simply laughable.

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Wed, 10/03/2012 - 16:11 | 2853031 becky quick and...
becky quick and her beautiful mouth's picture

piledriver, the mta of love.

Wed, 10/03/2012 - 16:13 | 2853045 redpill
redpill's picture

BREAKING NEWS:  Effective immediately, the BLS has classified mass transit fares to be food and/or energy, they aren't sure which but please trust them, we certainly can't have these unimportant transitory costs impacting core inflation statistics.

Wed, 10/03/2012 - 16:14 | 2853049 ziggy59
ziggy59's picture

The BLS has one letter too many.

Wed, 10/03/2012 - 16:18 | 2853076 knukles
knukles's picture

BLS classification paradigm: re food versus energy.

Can you "Eat this"?

Wed, 10/03/2012 - 16:18 | 2853079 malikai
malikai's picture

Meanwhile, bus fare in Beijing costs .4 RMB.

That's about $0.06.

Wed, 10/03/2012 - 17:14 | 2853376 SilverIsKing
SilverIsKing's picture

The MTA should just charge rats $2.25 for entry to the subway system.  That would pay to run the system for 20 years with no fare increases.

Wed, 10/03/2012 - 17:16 | 2853399 redpill
redpill's picture

Charge the roaches a quarter and the people could ride for free!

Wed, 10/03/2012 - 19:06 | 2853884 old naughty
old naughty's picture

Bus fare in Beijing ...costs $0.06...

so partly subsidized by the $25 B interests paid to China holding UST?

Hummmm. So Big Apple leads in muppet contributions to this...

and it will get worse, and spread?

Wed, 10/03/2012 - 19:16 | 2853904 notbot
notbot's picture

Wait, I'm confused.

You mean to tell me that if we give golden parachutes to every MTA employee after 20 yrs of "public service" we will run out of money for actual transportation???

But it is working so well for Detroit. Just ask the President:

"What’s happening in Detroit can happen in other industries" -BHO

Wed, 10/03/2012 - 17:48 | 2853598 Urban Redneck
Urban Redneck's picture

If I want to buy a round trip bus ticket to the nearest shopping mall to load up on iCrap and Big Macs, the Zurich Transportation Authority wants CHF 16.40 from me.

If NYers want to complain about the quality of the (dirty, erratic, unreliable, crime & vermin ridden, antiquaited) POS that they call public transit, that one thing, if they want to whine about the price- Charlie Mungers' got words for that.   

 

Wed, 10/03/2012 - 17:56 | 2853638 The Alarmist
The Alarmist's picture

It is true that european equivalent for the ride I get for $2.25 in NYC costs me something on the order of €4.30 or roughly $5.  Since my arrival in NYC in the late '80s, the subways have only gotten cleaner (if you can imagine that) and even air conditioned (you had to ride in the late-80's or early 90's to appreciate that). Cleanliness on the NYC subways is notably worse, but if you rode in the '80s and 'early '90s, you still realize things are much better than they have been.  But the on-board entertainment in NYC continues to be head and shoulders above the competition anywhere else in the world.

Thu, 10/04/2012 - 11:31 | 2855929 Totentänzerlied
Totentänzerlied's picture

"the on-board entertainment"

das' rayciss

Wed, 10/03/2012 - 17:33 | 2853513 LMAOLORI
LMAOLORI's picture

 

 

 

Can you "Eat this"?

This Woman Has 30 Free “ObamaPhones”  

Wed, 10/03/2012 - 17:59 | 2853639 The Alarmist
The Alarmist's picture

Probably keeps them on vibrate ....

BTW, it was noted in an explanation from the FCC that the phones themselves are not free, per se, only the lifeline phone service, but that some of the phone companies were throwing in the phones gratis to boost public interest.

Like so many other things in the land of the free, follow the money.

Wed, 10/03/2012 - 18:11 | 2853699 LMAOLORI
LMAOLORI's picture

 

 

I do I see my forced contribution every month when I get my phone bill

Wed, 10/03/2012 - 17:09 | 2853339 ACP
ACP's picture

Is there enough room between the cars and the wall to hang off the sides like in India?

Wed, 10/03/2012 - 22:01 | 2854409 Antifaschistische
Antifaschistische's picture

WARNING:  NY IS FLOATING A RED HERRING HERRING HERE

The FEDERAL TRANSPORTATION ADMINISTRATION recently embarked on one of their largest boondoggles ever.   The "State of Good Repair" Grants which transit agencies are able to apply for.

When Transit agencies around the country demonstrate how desperate they are, the FTA will shower millions, tens of millions, etc. of dollars on them (listen carefully) to maintain the junk they built that they could never really afford to maintain in the first place.

NY is playing off this and hoping to get a truck load of cash from the FTA to maintain a "STATE OF GOOD REPAIR".

http://www.fta.dot.gov/13248.html

 

Wed, 10/03/2012 - 16:13 | 2853033 Squid Vicious
Squid Vicious's picture

lol... "mass transit" ... tell me when that black limo that picks me up every night raises his fare from 200 West St. to Darien... oh I forgot it's on the house

Wed, 10/03/2012 - 16:19 | 2853048 knukles
knukles's picture

Only reason that constitutes "mass" transit is the 7 hookers bearing the blow all piled in with the drunken IBer.
But hell, makes it deductible as well as respectable on so many green levels....
Add 7 hookers and mileage per person goes from 14 to 98...

The only truth is math, Bitchez

Wed, 10/03/2012 - 16:24 | 2853106 Parabolic
Parabolic's picture

This is one if the MANY reasons i'm gettin the hell out of Dodge and moving to a more rural area where i can get me some farmland, arms, and do other torrorist-like activities. 

Wed, 10/03/2012 - 16:27 | 2853128 redpill
redpill's picture

Yeah but hookers and blow don't grow on trees bud, if you have any banker friends they won't want to hang out with you anymore.

Wed, 10/03/2012 - 16:33 | 2853167 knukles
knukles's picture

Oxymoron?
Bankers and friends in the same sentence?

Like after years of sobriety I have no drunken friends left...
Wonder why?

Wed, 10/03/2012 - 17:12 | 2853369 Harbanger
Harbanger's picture

I'm sorry, but that doesn't fit into the central plan.

"Obama is a longtime supporter of “regionalism,” the idea that the suburbs should be folded into the cities, merging schools, housing, transportation, and above all taxation. To this end, the president has already put programs in place designed to push the country toward a sweeping social transformation in a possible second term."

So dont get too comfortable because he's going to drag your ass back into a City. 

http://www.nationalreview.com/articles/312807/burn-down-suburbs-stanley-kurtz

Wed, 10/03/2012 - 16:13 | 2853047 fonzannoon
fonzannoon's picture

As a New Yorker my tax dollars are already commited to more worthwhile causes...

A Queens transgender person – who says that for 34 years she’s been a woman trapped inside a man’s body – has won the battle to get a health insurance company to pay for her sex change operation.Ida Hammer, 34, — who is already living as a woman — can finally make the full transformation to female after settling with MVP Health Care.“My insurance company should not be second-guessing my doctors,” Hammer said, in a press release. “I’m relieved that it is finally treating me fairly and covering the health care I need.”

Wed, 10/03/2012 - 16:16 | 2853070 knukles
knukles's picture

A transgender from "Queens" appearing on a thread about "mass" transit...
Kinda like whoda thunk Freddie Mercury was gay, skinny as a toothpick, harlequin outfits stuffed with sausages, dying of AIDS?

Wed, 10/03/2012 - 16:17 | 2853071 redpill
redpill's picture

Who gets the scraps left over on the cutting room floor?

Wed, 10/03/2012 - 16:20 | 2853086 knukles
knukles's picture

Say, didn't Tyler do that in a prior life?

Wed, 10/03/2012 - 16:32 | 2853154 redpill
redpill's picture

That would be Mao Sugiyama

 

And don't forget the fava beans!

Wed, 10/03/2012 - 16:36 | 2853180 knukles
knukles's picture

OMG I thought you referring to...
Never mind...

(Face in hands)

Wed, 10/03/2012 - 17:50 | 2853612 The Alarmist
The Alarmist's picture

Back in the '90s it was announced that MTA spent several hundred thousand dollars for its logo, which is essentially a black circle with the three letters M-T-A either coming out of it or going into it, depending on your point of view I guess.  

It was clear then that M-T-A stands for Money Thrown Away.

 

 

Wed, 10/03/2012 - 16:23 | 2853100 Dr. Engali
Dr. Engali's picture

Lorena Bobbit

Wed, 10/03/2012 - 18:00 | 2853649 The Alarmist
The Alarmist's picture

giving away our age here.

Wed, 10/03/2012 - 16:20 | 2853080 Squid Vicious
Squid Vicious's picture

as in "I-d-a hammer, where the f did it go?" ...or as in "I-d-a Hammer'd that chik" if I wasn't a woman trapped in a man's body?

Wed, 10/03/2012 - 16:21 | 2853083 Dr. Engali
Dr. Engali's picture

After many proffessional evaluations and discussions with my doctor, I discovered that I'm really a billionaire in a middle class body. I wonder is I can get my insurance company to cover that? 

Wed, 10/03/2012 - 16:25 | 2853110 knukles
knukles's picture

Dear Dr. Engali,

Concerning your recent request for approval of compensatory medical benefits with respect to your psychological shortfall believed to be associated with a noticeable lack of after tax disposable income, we recommend you secure a seat in the U S Senate.

Have a nice day
Infinitely Great Combined Ratio Health Services

Wed, 10/03/2012 - 16:29 | 2853138 redpill
redpill's picture

I'm a one-percenter lesbian trapped in a five-percenter man's body, someone help me please!

Wed, 10/03/2012 - 16:26 | 2853116 Parabolic
Parabolic's picture

she deserves an obombaphone

Wed, 10/03/2012 - 17:01 | 2853288 JuliaS
JuliaS's picture

She deserves a lobamabotomy.

Wed, 10/03/2012 - 16:15 | 2853052 Jason T
Jason T's picture

I read this yesterday... what a disgrace.  I'll be the first to say "drop dead New York" next time around. 

Wed, 10/03/2012 - 16:26 | 2853121 Dr. Richard Head
Dr. Richard Head's picture

And take California and Chicago with you. 

Wed, 10/03/2012 - 16:38 | 2853179 10mm
10mm's picture

Don't forget Detroit and any other ball breaking gun grabbing shithole.States or City's.

Wed, 10/03/2012 - 16:15 | 2853054 overhere2000
overhere2000's picture

Nice.

Wed, 10/03/2012 - 16:16 | 2853063 ziggy59
ziggy59's picture

Mass transit in NY is an oxymoron. Should be " mass standstill"

Wed, 10/03/2012 - 16:17 | 2853066 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke sees inflation?  Tyler, edit check on that first line?  Or did I miss the rate rise already.....

Wed, 10/03/2012 - 16:16 | 2853067 azzhatter
azzhatter's picture

Geez, can't they run those things on Ipads?

Wed, 10/03/2012 - 16:16 | 2853069 Dr. Engali
Dr. Engali's picture

I hope this doesn't carry on until 2024 I don't want to be sitting here twelve years from now reading the Hedge thinking "this thing is going to blow any minute now".

Wed, 10/03/2012 - 16:27 | 2853127 Dr. Richard Head
Dr. Richard Head's picture

Yeah, I thought I had blow up fatigue in 2009, yet here I sit and read away. 

Wed, 10/03/2012 - 16:16 | 2853072 LongSoupLine
LongSoupLine's picture

good, I fucking hate NY.  Fucking useless armpit of the country

Wed, 10/03/2012 - 16:24 | 2853109 EvlTheCat
EvlTheCat's picture

Wow, that sets a dangerous precedent LSL.  Which cities are the crotch and anus of the country?

Wed, 10/03/2012 - 16:29 | 2853135 Dr. Richard Head
Dr. Richard Head's picture

I claim Cleveland for the anus.  It smells like shit here.  Seriously, every time I get off the plane in Cleveland I think, "Who the fuck shit all over the place?"

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