Chicago-based Heartland Institute Reacts to Metra Fare Hike

November 17, 2011

The Metra Board of Directors today approved the agency’s 2012 budget, which includes fare increases across all ticket types and a variety of other changes to Metra’s fare policies. Starting February 1, 2012, one-way tickets will increase an average of 15.7 percent across all fare zones, while 10-ride tickets will go up an average of 30 percent and monthly passes will increase an average of 29.4 percent. Reduced-fare one-way tickets will increase an average of 10.3 percent, reduced-fare 10-ride tickets will increase an average of 18.9 percent, and reduced fare monthly passes will go up an average of 10.8 percent. Taken together, the overall average increase is 25.1 percent.

The following statement from Steve Stanek, a research fellow for budget and tax policy at The Heartland Institute – a free-market think tank – may be used for attribution. For more comments, refer to the contact information below. To book a Heartland guest on your program, please contact Tammy Nash at tnash@heartland.org and 312/377-4000. After regular business hours, contact Jim Lakely at jlakely@heartland.org and 312/731-9364.


“I suppose it’s only fair that Metra riders get slapped around with these big fare increases. For the last three years, everyone else in the Chicago region has been slapped around by some $500 million of annual sales and real estate transfer tax increases that were imposed to fund Metra, the Pace suburban bus system, and the Chicago Transit Authority.

“As a part of a government entity with the power to force people to fund it – even when people don’t use it – Metra and the other Regional Transportation Authority services don’t have to worry much about customer satisfaction or ensuring that prices reflect demand.”

Steve Stanek
Research Fellow, Budget and Tax Policy
The Heartland Institute
Managing Editor
Budget & Tax News
sstanek@heartland.org
312/377-4000


My take on the Metra fare hike is that it too low for rush hour travelers and too high for off-peak travelers. The fact that trains are overcrowded during rush hours is a strong indication that the price is too low. This is true whenever patrons of any good or service have to wait in line or are crowded. Another distortion in the allocation of resources is running near empty trains during off-peak times.

My suggestion is to double the the fares for rush hour trains and cut in half the fares for off-peak trains. This will not hurt low income travelers because they are typically on a different schedule from office workers. Think of restaurant workers. janitors, and hotel maids. The side benefit is that it will educe somewhat the need for new equipment and at the same time provide funds for capital investment. It might also signal private transportation providers like subscription buses and jitneys to skim the cream off the top of the peak crowding. This will drastically reduce the time costs of all travelers, which is not all that bad. 

Senior Fellow, Economics
The Heartland Institute
312/377-4000


The Heartland Institute is a 27-year-old national nonprofit organization with offices in Chicago, Illinois; Washington, DC; Austin, Texas; Tallahassee, Florida; and Columbus, Ohio. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site or call 312/377-4000.