Part of the thinking behind the MTA’s proposal to offer a variety of significant fare discounts between Thanksgiving and the New Year is likely fear that political leaders will find ways to appropriate the build-up of transit operating funds for other purposes.  That problem has been seen in recent memory — Governor Pataki and then-Mayor Giuliani imposed deep cuts in state and city aid to transit operations during the 1990s when the MTA experienced higher-than-anticipated revenues (MTR #8). 

   The mix of uses for the surplus that staff are likely to propose to the MTA board is:

· $450 million for a partial pension pay-down, which will save annual costs to the transit system for some time;

· $100 million for the fare discounts;

· $100 million to cover additional security costs;

· $50 million in service improvements.

From a political point of view, it may be difficult for elected officials with other designs on the money to oppose the package.  Some squabbling over the distribution of discounts between commuter rail and city transit is likely — Newsday fanned these flames with an article today but ignored the fact that the roughly 25% of Long Island transit riders who use the MetroCard-based Nassau County bus system would get the same discount package as city subway and bus riders.

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