Several proposed expansion plans for the 'Fair Fares' low-income transit discount program would be far cheaper than Mayor Zohran Mamdani's proposal to make
The city’s Independent Budget Office released a pair of reports finding that expanding Fair Fares would cost far less than implementing free buses.would be far cheaper than Mayor Zohran Mamdani’s proposal to make all city buses free, although they would benefit different populations, according to a pair of new analyses from the city’s Independent Budget Office .even the most expensive proposal for growing the city-subsidized Fair Fares program would be roughly half a billion dollars cheaper thanFare-free buses are one of Mamdani’s three core campaign promises, but he has spoken little about it since taking office.
Launched in 2019, Fair Fares currently offers half-priced OMNY cards to anyone aged 18 to 54 earning at or below 150% of the federal poverty level. That equates to an individual earning nearly $23,500 a year and a family of four bringing in $48,200 annually. Both free buses and Fair Fares have the same goal: to make transit more accessible to low-income New Yorkers.
But the former is a universal program that would benefit any bus rider, and the latter is means-tested, making subway, bus, and paratransit trips more affordable for at most a couple of million people. Sarita Subramanian, IBO’s senior research and strategy officer, said the budget watchdog released the reports on the same day to give policy-makers weighing both proposals more information — without taking a position on either one.
She said that while the various Fair Fares expansion ideas are cheaper than fare-free buses, the programs are quite different.
“Free buses are intended to serve all bus riders and Fair Fares is intended to be a targeted program,” Subramanian said in an interview. “It’s really a matter of whether there’s interest in doing universal access, which is fare-free buses, or a more targeted program, and that’s what Fair Fares offers. ” According to IBO’s analysis, it would cost about $1.1 billion annually to make buses fare-free.
The assessment includes express bus routes in the plan and assumes that making buses free will boost ridership by 25%. It also looked at the effects of lower and higher jumps in ridership on cost — 15% and 35% respectively. But Emily Pramik, IBO’s lead budget and policy analyst, said they considered several factors when calculating the cost of fare-free buses, beyond the largest expense: replacing lost farebox revenue.
Those include increased expenses like buying new buses and hiring new drivers, and changes in rider behavior. By contrast, an expanded Fair Fares, which currently bears an annual $121 million price tag, could run between $177 million and $509 million each year, according to the report. Pramik said it is important to understand that there is a key difference in who pays the cost of each program.
While Fair Fares is entirely funded by the city, paying for fare-free buses will be determined through negotiations with Gov. Kathy Hochul and state lawmakers, who must also approve the program.
“Fair Fares is an entirely city-run program,” Pramik said. “It is something that is entirely paid for by the city. It’s up to the city to decide how they might want to expand it if they do. Whereas free buses is something that would have costs but how those accrue to the city vs. the MTA vs. the state is really subject to negotiations.
” The analysis comes a day before officials from the city’s Human Resource Administration — a subdivision of the city Department of Social Services that administers Fair Fares — will answer City Council members’ questions about Mamdani’s executive budget proposal.for free buses nor expanding Fair Fares. However, in its own proposal for the coming fiscal year’s budget, the, which would boost the income threshold to 300% of the federal poverty level in addition to making Fair Fares free for those earning at or under 150% of the FPL.
The fiscally conservativewants to increase the income level to 250% of the FPL, but keep fares half-priced rather than make them free. IBO reviewed five proposals to deepen or broaden the program. The first would be the same as the council’s proposal, and the second would make it free to all city adults living at or below 150% of the FPL — including seniors and those with disabilities, who currently receive half fares from the MTA.
The other three variations would keep the amount of the subsidy at 50%, while qualifying people at higher income levels. The three options would grow eligibility to those making 200%, 300%, and 400% of the FPL, respectively. Scenario A would be double the price of Scenario C, which is the cheapest of the five, the report found. The highest cost option would be expanding eligibility to 400% of the FPL.
The report also revealed that opening the program to higher income levels would boost enrollment and the number of transit rides participants are taking each week — thus making it more expensive. Currently, program enrollment lags at around 40%, and participants take only 2.8 trips a week, the report found.
For instance, if the program expands to 200% of the FPL, IBO projects that enrollment for newly eligible New Yorkers would increase to 57%. Additionally, across all scenarios that raise the income threshold, the budget office estimates that riders earning above 150% of the FPL would use transit 10 times per week.
Brian Fritsch, associate director of the Permanent Citizens Advisory Committee to the MTA rider advocacy group, said in a statement that the report “clearly demonstrates” the benefits of growing the program.
“As the IBO report clearly demonstrates, the Fair Fares program can provide meaningful relief to New Yorkers who are desperate for a more affordable city now, in this year’s budget, at a cost that won’t break the city’s bank,” Fritsch said. “We strongly urge Mayor Mamdani to get on board and deliver more affordable transit now. ”Ethan Stark-Miller is amNewYork’s Transit Editor.
He covers the MTA , the city Department of Transportation, and all other forms of getting around in the Big Apple. He previously covered politics for amNY.
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