New York City officials have announced the largest expansion to the Fair Fares program, which provides discounted public transit fares for low-income residents. The City Council approved the change on Tuesday as part of a budget agreement with Mayor Zohran Mamdani. The expansion will extend half-price bus, subway, and paratransit fares to approximately 340,000 additional New Yorkers, increasing total eligibility to about 1.3 million residents.

Under the revised program, New Yorkers earning up to 200 percent of the federal poverty level—roughly $32,000 annually for an individual or $66,000 for a family of four—will qualify for the discount. The previous threshold was 150 percent of the poverty level, leaving out many lower-income workers, including those earning the city’s minimum wage of $17 per hour. The expansion is expected to take effect later this year and increase annual program costs to $175 million from roughly $100 million, reflecting both the higher income cutoff and anticipated increased enrollment.

City Council Speaker Julie Menin emphasized the importance of affordable transit for many working residents, noting that current fares remain a barrier for some users. Shaun Abreu, the Council’s majority leader and chair of the transportation committee, called the expansion a positive step that could help reduce fare evasion, which has been prevalent on city buses.

However, the Council did not approve proposed amendments to automatically enroll the lowest-income residents or to make their transit rides fully free. Menin, who had previously supported those measures, indicated the Council is still reviewing those options.

Mayor Mamdani, who campaigned on eliminating bus fares altogether, has prioritized making buses free and faster over expanding Fair Fares. His initial budget did not include funding for the program’s expansion, though he expressed support for raising the income eligibility threshold. At a briefing on Tuesday, Mamdani described fare-free buses as part of a longer-term vision, stating both goals could be pursued simultaneously.

The financial implications of a fare-free bus system remain contested. The Metropolitan Transportation Authority, which operates the subway and bus networks, estimates the cost at over $1 billion annually, while Mamdani projects closer to $700 million. Some transportation analysts caution that making only buses free might be inefficient, since many riders transfer to subways, which require paid fares. On an average weekday, about 4 million people use the subway and 2.5 million take buses in New York.

Advocates argue the expansion is essential for improving transit affordability, particularly for marginalized groups disproportionately affected by fare costs. A 2024 report from the Community Service Society of New York found that one in five residents struggles to pay for transit, with Black and Latino commuters and working mothers most impacted. Danny Pearlstein, policy director of the Riders Alliance, noted that raising the eligibility would assist low-paid but vital workers such as home health aides and child care providers.

Mamdani has criticized means-tested programs like Fair Fares for their complex application processes, which he believes limit access. He contends that eliminating bus fares for all riders, regardless of income, is a more straightforward approach to supporting low-income New Yorkers.

Since its inception in 2019, Fair Fares initially covered residents earning no more than 100 percent of the federal poverty level, with eligibility limited to those between ages 18 and 64. The program has typically cost about $90 million annually but is underutilized, with only around 40 percent of eligible individuals enrolled, according to the City’s Independent Budget Office.