The Metropolitan Transportation Authority proposes transit, bridge, and tunnel fare increases of 8 percent for next year, in an attempt to close the rapidly depleting budget deficit of almost $900 million, the NY Times reported. If the fare increases are approved for this March, the increase is should take effect next July.

The deficit was not always this bad. As recently as February, the authority had predicted a 2009 budget deficit of slightly more than $200 million. Now, even with a new budget plan that includes more than $300 million in aid from the city and the state, raised fares will still be necessary to close its budget gap. Furthermore, MTA is lawfully required to function with a balanced budget.

The customer’s burden is largely due to greater financial shortages. With real estate taxes in decline and gas prices on the rise, MTA will be scrounging further for funds. Next year, real estate tax receipts are expected at $242 million below previous forecasts, and fuel costs are projected at an additional $123 million, $88 million higher than anticipated.

This is the second time that the subway fare has increased two consecutive years—the last double-increase was from 1980 to 1981, when the fare went from 50 to 60 cents in June 1980, then to 75 cents in July of 1981. When the authority raised fares this past March, it did not change the base subway and bus fare at $2, after having proposed to raise it to $2.25.
If the fare rises, it will probably happen in 25 cent amounts. However, most riders rely on either unlimited-ride MetroCards or the pay-per-ride MetroCards that provide a 15 percent bonus on purchases of $7 or more, thus not using the base fare tickets.

Last year, the authority planned to propose a fare and toll increases every two years, beginning with the fare that took effect in March, scheduling the next increase scheduled for 2010. Though the March increase was originally 6.5 percent, Gov. Spitzer called for a reduction. Now, with the call for a fare increase next year, the authority is accelerating that schedule.

In December, another budget proposal from a state commission is set to recommend long-term relief from the authority’s financial challenges. Higher fare was an inevitable suggestion to absolve the authority’s financial problems but the city will try to shoulder some of the burden.