Budget hawks and conservative commentators seemed to react viscerally to the MTA’s proposal to include holiday season fare discounts among a broader spending plan for the downstate mass transit system’s greater-than-anticipated  2005 revenues.

   In news pieces and editorials on Thursday, critics complained that a $700 million surplus should be spent on such needs as unfunded pension liabilities, security and service.  But in fact the lion's share of the MTA surplus is going to exactly these needs. 

   “There’s no question that the most responsible use of the money would be to pay down the authority's unfunded pension liability,” Edmund J. McMahon, of the Manhattan Institute told the NY Times.

   The MTA’s plan indeed is to use $450 million of the roughly $700 million total to reduce pension liabilities, creating big annual savings in the future. 

   Only a relatively small amount supports holiday discounts, which have long been advocated to reduce end-of-year gridlock and bolster the region’s economy. They also may cost less than predicted.

   Importantly, Mayor Bloomberg has endorsed the spending package. Democratic mayoral candidate Fernando Ferrer denounced the fare discount proposals as an election season gift to Bloomberg, but that argument is hard to credit for benefits that will not take hold for straphangers until late November at the earliest.

   Only Newsday’s coverage explored the problem of  transit budget cuts by the governor, state legislature and mayor that the MTA often faces when its finances are looking up. With its spending proposal, the MTA appears to have outraced any budding city or state move to steal the surplus.   

   The Daily News editorial board raised, in a crabby way, one of the most interesting and far-reaching facets of the issue: “The reduced fares will likely draw more riders. As more riders board, MTA revenue goes up and the cost of the discounts drops.”  The News is concerned that riders reap the full $50 million give-back that the MTA has promised as fare discounts.  But if the discounts come close to paying for themselves in the form of additional riders, it’s possible that holiday-season cut fares could become a regular feature of the transit system.

   Even critics of the plan agreed that that issue is worth exploring.  “It’s not a bad idea to experiment with differential pricing — and the weekends might be a good place to start," the Manhattan Institute’s Nicole Gelinas told the Times.

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