MBTA prepping plan to expand low-cost fare options

The MBTA Board in January plans to start formally considering potential fare changes, including low-cost fares that could benefit tens of thousands of riders.

Agency staffers are developing the details of a low-income fare program that would expand reduced fare options already available to certain groups, including students, young adults, seniors and people with disabilities. The pending policy could reach between 50,000-60,000 riders over the first five years, said Steven Povich, the MBTA's senior director of fare policy and analytics.

Estimates show that there are roughly 60,000 adults ages 26 to 64 who have incomes under 200% of the federal poverty level but have no reduced MBTA fare benefits, Povich said. Slashing their fares in half could translate into $720 in annual savings for daily bus and subway riders, and $1,908 for certain commuter rail riders.

"This is really significant savings for our riders across our network, whether you're a frequent or infrequent rider, whether you're on the bus and subway network, or the commuter rail," Povich said. "The annual savings are really material."

Povich said the low-income fares, or discounted fares for low-income riders, would be offered on all transportation services, including commuter rail and paratransit, and boost ridership by 25 percent to 30 percent.

"We know that low-income fares are a really exciting program. Staff have spent a tremendous amount of time looking at what it would mean for our operations, what it would mean for our riders, and how we could actually do a great job implementing a program like this," Povich told the MBTA Audit and Finance Subcommittee Thursday.

MBTA staff are planning to present a "fare change package" to the subcommittee and full board in January or as soon as "reasonable," Povich said. The goal of the package is "to improve affordability for low-income riders, increase economic mobility across the entire MBTA service area and all modes, and encourage ridership recovery post-Covid, with a targeted, financially sustainable and proven approach," according to his presentation materials.

Introducing the package would kick off a 45-day public comment period, and staff would conduct an equity analysis required under federal law to ensure fare changes "don't have a disparate impact on riders of color or a disproportionate burden on low-income riders," Povich said. Povich said fare changes would go into effect within two to six months following an affirmative vote from the MBTA Board.

Povich, whose presentation addressed ensuring fare affordability and simplifying the pricing structure, made no mention of potential fare changes for riders who are not low-income. 

The package isn't expected to contain fare increases, and its cost "remains under development," MBTA spokesman Joe Pesaturo said.

"MBTA staff continue to refine a proposal to bring to the Board based on the themes discussed in this morning’s presentation, with particular focus on fare affordability, simplification, and technology changes," Pesaturo said in a statement to the News Service.

The MBTA's fare analysis over recent months is supported by $5 million from the fiscal 2024 budget, coming from the first round of surtax revenue, that Gov. Maura Healey had sought to "research the feasibility of implementing a means-tested fare program."

The MBTA is working on a brief online application process for the pending program, which would incorporate personal and income eligibility data from other state agencies and services, he said.

Officials need to consider a range of factors when debating change fares, including budget constraints.

Fare revenue is expected to bring in nearly $420 million in fiscal 2024, which is about 16 percent of the MBTA's budget, Povich said. The figure used to hover around $700 million before the COVID-19 pandemic, he said.

"While it's not still at that level, it remains an important driver of our ability to provide service," said Povich, who noted fares are "one of the levers that we have most control over in terms of our revenues."

To boost travel among low-income riders, MBTA officials must improve frequency and reliability, said Lynsey Heffernan, assistant general manager for policy and strategic planning.

"We also know that commuter rail is, I think, an opportunity for us to really think about a low-income fare on that network out to Gateway Cities, how potentially transformative that could be for those residents of those communities to have an opportunity to really reduce their transportation costs and then consider either a home or a living situation where really transportation has been a barrier," Heffernan said.

She added, "When we think about what could potentially drive and be part of those bigger economic conditions, that's a place that's exciting for us, certainly as a staff to think about, but also for us as we move forward here."