Fare Hike Averted

Turns out the T doesn’t need a fare hike this year after all!  Last month the T announced that it would increase fares again — subway fares would break a 28-year inflation-adjusted record to set an all-time high of $2 per ride.  Around the same time, I noted that the last two occasions when fares broached the inflation-adjusted $1.75 mark, strange things happened.  Fare increases implemented in 1954 and 1981 that took prices over the inflation-adjusted $1.75 mark were rescinded the next year.  Those were the only two years in more than a century of transit in Boston that nominal subway fares actually receded.

Looks like history is repeating … or at least rhyming.  Gov. Patrick directed that the proposed 2009 hike is off the table, for now.  Hopefully major service cuts also were averted.  If the consensus economic view is correct that inflation will remain subdued for some time — and assuming the inflation-adjusted fare of $1.75 remains the third-rail of subway pricing — that proposed hike won’t be finding its way to riders anytime soon.

Grabauskas Retrospective; What Now for T?

Say what you will about Dan Grabauskas; he is a political survivor.  The public servant who reformed the Massachusetts Registry of Motor Vehicles resigned under pressure from Governor Patrick and his appointee James Aloisi today, nearly a year short of the end of his five-year term as general manager of the MBTA.  The Democratic governor will have his chance to appoint a successor, but the bitter partisan flavor probably will linger with voters for some time.  The tab for buying Gov. Patrick an extra nine months of direct control of the MBTA: $327,487.  I hope that turns out to be a good investment, but at the moment it’s not so clear that Messrs. Patrick and Aloisi gave taxpayers a good deal.

In 2005, Grabauskas took the job of general manager with a clear vision.  The T would treat riders like customers; the system would be reliable, clean, courteous, and safe.  But mainly clean.  And accessible; inaccessibility “impacts not only on the disabled, but on parents with children in strollers, as well.” Grabauskas professed to be a neatnik; he was particularly concerned about the condition of elevators and escalators.  He apparently believed that if he made the T a comfortable place to be, riders would flock and revenues would soar.  And, of course, he wanted to control costs.

So four years later, how did he do?

Grabauskas never shrunk from the gaze of his “customers,” for example writing a regular Q+A column in the free daily paper Metro, and appearing more than once on WBUR public radio.  He was determined to keep riders safe; he initiated random, highly visible police screening checkpoints.  He committed to spending hundreds of millions of dollars to make the T more accessible, installing announcement screens and elevated platforms on the Green Line.  He resisted union contract demands and agreed to wage increases only after being overruled by a labor arbitrator.  The T renovated the Charles Street station and installed a new train control system on the Red Line that permitted more frequent service.  And there is the electronic fare system.

The list goes on.  Grabauskas was nothing if not engaged in the goings-on at the T.  Perhaps one can disagree with him on policy matters — for example it might be reasonable to question the wisdom of a having a broke organization with heavy capital needs spend hundreds of millions of dollars in an effort to meet the unique requirements of less than 0.1% of T riders — but the man demonstrated integrity and dedication to his “customers.”

But many things never changed.  Yes, the trains still are slow and late.  Yes, the escalators have at times been scandalously unreliable.  Yes there still are door-openers on the  Red, Green, and Orange Lines.  Yes, Kenmore Station still is under construction nearly five years later.  No, Dan Grabauskas does not commute to work on the T.  Yes, the T still is broke.

No Cell Zone

No Cell Zone

But none of those were the reasons that Governor Patrick and his appointees gave for the reasons they had lost faith in Grabauskas.  The breakdown occurred, they said, because two Green Line drivers in two years apparently had ignored traffic signals for different reasons, and Grabauskas was not in Washington, D. C. when the NTSB released its report on one of the accidents.  And there was a power outage on the Green Line.  That’s it.  Never mind that Grabauskas nearly overmanaged the aftermath of the Government Center Green Line collision by banning cell phones from drivers.  And never mind that he was on an unpaid budget-related furlough at the time the NTSB report was released.  And never mind he is not the T electrician.

No matter; Grabauskas is out, but to Gov. Patrick’s likely chagrin, the former T general manager emerges from the tussle virtually unscathed.  That isn’t true for the Governor and his appointees.  The termination looks like short-term political retribution — at taxpayers’ expense.

Unfortunately, the real loser here looks to be the T.  The authority is leaderless at a critical time where the patchwork of agencies is being reexamined and when the modes of transportation finance are in flux in a way they have not been in memory.  The Governor has made noises time and again that he is a friend to transit.  Now he has an opportunity to go from words to action.

Proposed T Fare Hike Would Break 28-Year Record

Last week the T proposed to increase subway fares to $2.00 and local bus fares to $1.50.  From just 85¢ in 2000, the proposal would more than double subway fares in just nine years.

What is really interesting about this is it also would put subway and bus fares at their highest levels in Boston ever, even after the prices are adjusted for local inflation.  In other words, the Boston subway never has been as costly to ride in real world terms as it will be if the fare increase is approved.

The Boston subway debuted with a nickel fare in 1897, and slowly the fare rose, to 10¢ in 1919, 15¢ in 1949, 25¢ in 1968,  75¢ in 1981, and 85¢ in 1991.  The MBTA Advisory Board published then-current figures in 2006 during the last round of fare increases.

T to Riders: How High is Too High?

T to Riders: How High is Too High?

In 1897, a nickel bought more than it does today.  A lot more.  According to the Bureau of Labor statistics, a nickel then had 96% more value in Boston than a nickel today.  If you adjust the value of the nickel (or quarter) for the additional buying power in had in the past, you get a chart like the one on the right (which shows fares in constant dollars since 1945).

The actual value of the nickel fare in 1897 was $1.35 in today’s dollars, which is inexpensive but not so much of a steal.  The standard fare right now is $1.70.  In the Boston subway’s 112-year history, the standard fare been higher than it is right now in constant dollars just three times: in 1933 ($1.71), 1954 ($1.77), and in 1981 ($1.90).  And for 28-years, the 1981 peak has stood as a high-water mark for the regular subway fare (in constant dollars).  If the T gets its way and promptly implements the fare hike, it will set a new record for unaffordability, although because exit fares recently were eliminated the burden will fall disproportionately on innercity riders who do not exit at suburban stops where previously there were surcharges.

What is even more interesting is that the T is raising fares just as prices for private transportation are falling.  Or at least not rising to the same extent.  The chart shows dotted lines for private transportation costs in Boston and nationwide for public transit costs (also from the Bureau of Labor Statistics), both of which have continued to decline relative to background inflation as the T dramatically raised its fares.  (note: for purposes of the graph, private transportation costs were equalized to subway fares for the year 2000; the trend of costs upward or downward is what is significant)  For fifty years, changes in regular T fares corresponded roughly to changes in private transportation costs (both in direction and magnitude), but in the last ten years private costs have been flat whereas standard subway fares soared.  I’m no economist, but it seems like the T should be able to keep its customers’ costs flat.  Instead the T simply failed to hold the line.

Riders still can take heart from a historical perspective.  Each of the previous real dollar fare-price records were short-lived.  In 1981 and 1954, the fare increases were almost immediately rescinded.  The next year fares were cut— an unusual occurrence– by 20% and 25% respectively.  In 1982, for example, the Legislature restored funding that the T lost the previous year.  And in 1934, a bout of deflation that caused the rise in the real fare price was broken and the real fare price in constant dollars declined (even though the stated fare was unchanged).

The rate hike proposal probably isn’t the best option.  Probably a fairer solution (pun alert) would be to restore some rationality to the subway fare structure by reintroducing some form of distance pricing.  Functionally the T is closer to that goal because it has introduced an electronic fare system, but distance pricing would require a revival of exit fares.  And Charlie got stuck on the subway as a result of exit fares.  No one wants Charlie to get stuck again.  A 60-year-old ditty still drives policy in some quarters.  More on distance pricing another time.

Although the fare hike may possibly be a fait accompli, the T scheduled “workshops” for riders to speak out about it.  I expect they should get an earful.  Not for nothing, the first session is scheduled to be conducted in the State House,  Gardner Auditorium, on  Monday, August 10, from 4pm to 7pm.  Probably the T hopes someone there will be listening.

Whatever decision the state makes, it will be a painful one.  But on the other hand, history tells us that $2.00 to ride the Boston subway — even for just one stop — is just too high a price.