By Paul Berger

Leaders of New York's Metropolitan Transportation Authority are expected to decide this month whether to raise fares on New York City's subway and bus systems and regional commuter rails at a time when the Covid-19 pandemic has taken a financial toll on many of its riders.

The MTA, the operator of the nation's largest transit system, instituted a schedule a decade ago of raising fare and toll revenues by about 4% every two years to keep pace with inflation. The authority's board members are slated to vote on increases to fares on Jan. 21 and on tolls next month.

Some board members want to delay the latest fare increases, which could take effect in the spring, because so many people are out of work. They also say the extra millions of dollars the increase could raise wouldn't dent the authority's expected deficits, which measure in the billions.

"This isn't the time to do this," said David Jones, one of four voting MTA board members who represent Mayor Bill de Blasio, a Democrat.

Mr. Jones said he is considering asking for the fare vote to be delayed until at least the middle of the year. By that time he hopes the authority will have a clearer view of its finances, the regional economy and employment levels.

Robert Linn, another of Mr. de Blasio's appointees, said he favors imposing a fare increase that doesn't take effect until January 2022. Mr. Linn noted that the MTA recently secured $4 billion in the latest coronavirus aid package, which should see the authority through 2021.

Mr. Linn added that with mass-transit ridership down between 50% or more, an increase this year wouldn't generate much revenue. But it would hurt people like grocery-store and health-care workers who have continued to commute to work during the pandemic.

The state-controlled MTA is desperate for revenue. It balanced its 2020 budget using a $3.9 billion federal bailout and by borrowing more than $3 billion in short-term debt from the Federal Reserve's emergency lending program.

The MTA board is dominated by six appointees of Gov. Andrew Cuomo who control a plurality of its 14 votes and who are often supported by members recommended by the executives of outlying counties.

Transit advocates say Mr. Cuomo should find alternative ways of raising revenue such as taxing wealth and income rather than raising prices for essential workers. "The governor needs to find progressive revenue raisers," said Danny Pearlstein, a spokesman for advocacy group Riders Alliance.

Representatives of Mr. Cuomo, a Democrat, declined to comment. Lawrence Schwartz, one of six voting board members appointed by Mr. Cuomo, said he didn't want to take a public position before he had a chance to discuss options with board colleagues ahead of and during their Jan. 21 meeting. "I think there may be ways to generate the revenue the MTA needs without hurting people that rely on the system the most," he said.

Mr. Schwartz repeated previous comments he has made that he would like to keep the base fare for a subway or bus ride at $2.75 or discount it further. He also noted that the MTA loses a significant amount of revenue to fraud associated with people tampering with seven-day and 30-day unlimited Metrocards. Previously, he has suggested considering the elimination of some unlimited cards.

The authority held a series of public hearings at the end of last year to receive comments on a long list of fare and toll proposals that include eliminating seven-day and 30-day unlimited MetroCards and raising the base subway and bus fare to $3. The proposals also include a flat fare for most commuter rail riders and varying tolls at bridges and tunnels based on time of day.

Abbey Collins, an MTA spokeswoman, said, "We recognize our customers are facing unprecedented hardship and the MTA Board will take all this into consideration as well as the thousands of public comments received after eight virtual hearings when making its decision."

The MTA was in a fiscal crisis before the pandemic hit the New York metropolitan region in early 2020. Its precarious financial plan for the coming years, which assumed biennial fare and toll increases, included projected annual shortfalls of hundreds of millions of dollars.

The authority has reduced costs by freezing nonessential hiring and cutting contracts with consultants. Without federal aid, authority officials warn they may have to cut transit service by 40% or 50%.

"We feel that the right balance right now would be to continue fare and toll increases as scheduled because the fiscal situation is so dire," said Andrew Rein, president of the nonpartisan fiscal watchdog, Citizens Budget Commission.

During normal times, the MTA carries about eight million people each weekday on two commuter railroads and on New York City's subway and bus systems. Its seven bridges and two tunnels earned revenue in 2019 of about $2 billion.

Although traffic at the authority's tolled crossings has almost recovered since the region shut down earlier last year, the authority doesn't expect mass-transit ridership to return to near pre-pandemic levels until 2024.

The Democratic victory in Georgia's Senate runoff elections on Jan. 5, which handed Democrats control of the U.S. Senate, has given officials hope the MTA could receive further federal aid.

They are also optimistic the incoming Biden administration will help to advance a congestion-pricing program to charge drivers entering Manhattan's central business district, which should raise billions of dollars to fund transit improvements. The plan, which requires federal approval, stalled under the Trump administration. It was supposed to begin around now.

Write to Paul Berger at Paul.Berger@wsj.com

(END) Dow Jones Newswires

01-10-21 1014ET