Senate MTA Rescue Plan Ripped

Commuters Face 23% Fare Hike; MTA Sets March 25 Deadline

By Conor Greene

A plan by Senate Democrats to rescue the Metropolitan Transportation Authority that would have reduced the looming fare hike and prevented tolls on East and Harlem river bridges was dismissed by Governor David Paterson as a short-term solution to a long-term problem.

The MTA’s 2009 operating budget includes a $1.2 billion deficit, and the agency has said it will raise bus and train fares by 23% in the coming months unless the state bails it out. Senate Majority Leader Malcolm Smith said Tuesday that his plan could maintain current levels of service while raising fares by 4% through implementation of a payroll tax.

“Particularly during these times of severe economic distress, it was absolutely essential that we protect working families’ access to an affordable and reliable means of mass transit with an MTA recovery plan that minimizes fare hikes and prevents the loss of services and jobs,” said Smith.

Facing the growing budget deficit, the MTA initially proposed extensive service cuts and fare increases of up to 23%. Last year, Gov. Paterson appointed former MTA Chairman Richard Ravitch to make recommendations regarding the way in which MTA is funded. That group recommended a payroll tax of 33 cents per $100 of payroll within the 12-county region the MTA serves, an 8% fare increase and tolls on the East and Harlem river bridges.

Under the Senate Democrat’s plan, the payroll tax would be reduced to 25 cents per $100 of payroll (expected to generate $1.16 billion) and an increase of 4% for MTA, Long Island Railroad and Metro-North riders (expected to generate $117 million). Under the senate’s plan, all potential service cuts will be restored and no fares would be placed on bridges.

During a press conference in Albany to announce the rescue plan, Smith said it is clear that the MTA currently has separate shortterm and long-term problems to address. “What they have done is basically linked the short-term and long-term problems together, which we believe is not a sound practice,” he said, adding that the short-term problem is in regard to the authority’s operational budget, which will run out of money by June 30. The capital budget, which Smith said is the longterm problem, is financed through 2010.

“The last thing we wanted to was write a blank check to the MTA when our state could least afford it. Through a deliberative process and the insistence on greater measures of transparency, our conference was able to determine the best course of action to address the MTA operating budget shortfall and assure New Yorkers that their money would be spent wisely,” said Smith. “We don’t want to have an AIG situation with the MTA.”

However, it was the Democrat’s focus on just the short-term operational shortfall that concerned Gov. Paterson, who has backed the Ravitch Commission’s recommendation. “The solution must be taken now,” he told reporters after Smith’s plan was announced. “Unfortunately there seems to be a belief that these types of issues can be deferred into some sort of future activity. This is what’s gotten Albany in trouble time and time again.”

In addition, Dale Hemmerdinger, MTA chairman, claimed that the Senate plan will still leave the authority $1 billion short. He said that under the Senate plan, fares would have to be raised by 17 percent, not 4 percent. MTA officials have said they are ready to vote next Wednesday to move forward with planned service cuts and a 23% fare hike if state leaders can’t come to an agreement on a rescue plan.