MTA Bailout Plan Likely

Huge Cuts, Fare Hikes Would Be Avoided

By Conor Greene

The doomsday budget scenario faced by the MTA has likely been averted thanks to a last-minute bailout package reached on Tuesday night by Gov. David Paterson and legislators in Albany. Officials say it will help avoid huge service cuts and fare hikes that had been threatened in recent months.

As of Wednesday morning the plan still needed approval from the state Senate, where Democrats hold a 32-30 majority. Under the bailout, announced by the governor, Assembly Speaker Sheldon Silver (D-Manhattan) and Senate Majority Leader Malcolm Smith (D-Queens), the cost of one-way subway and bus fare will likely increase from $2 to $2.50.

The MTA had proposed a doomsday budget that would have featured fare hikes of as much as 30% as a result of massive deficits the agency is facing. Under that scenario, the cost of a monthly unlimited MetroCard was to increase from $81 to $103. However, commuters are now facing fare and toll hikes of about 10%, and a monthly MetroCard will cost about $89.

In addition, the agreement includes a 50-cent taxi surcharge and a payroll tax. However, it will not require tolls on East and Harlem river bridges, though fares and toll will rise again by 7.5% in 2011 and 2013. The bailout provides enough funding to cover two years of the MTA’s five year capital plan, which starts next year and funds basic maintenance including upgrades to tracks and signals.

"Today's agreement will allow commuters to avoid the painful service reductions approved by the MTA Board earlier this year, and dramatically reduces the proposed fare and toll increases," said Gov. Paterson at a news conference. "This legislation will also allow the MTA's critical infrastructure rebuilding program to continue unimpeded at least through the end of 2011."

In a statement, MTA officials said the agreement allows the system to continuing operating without huge service cuts. “This resolution ensures that we can avoid the actions most painful to our customers and most detrimental to our ability to operate the transit system. We will begin working immediately to revise our budget and implement the reduced fare increase.”

State Senator Joseph Addabbo (D-Howard Beach) said on Wednesday morning that the bailout plan is a “necessity” that must be acted on. “We have to do this. We cannot rely on the MTA to raise fares by 24%. There are positives and negative, but all in all it will avoid service cuts in the area and provide stability in the MTA,” he said.

As part of the agreement, the MTA is subject to additional oversight, including forensic audits – something Addabbo has long being calling for and said was a crucial aspect of the plan. “It requires the MTA to undergo financial scrutiny and audits, and creates a more transparent and accountable MTA to the people of the district,” he said. “We’re certainly not going to be back here a year from now doing this again.”

In addition to huge fare hikes, the original doomsday budget floated by the MTA would have required the elimination of more than two dozen bus lines and several subway lines, longer wait times and overnight station closings. News that these drastic measures will likely be avoided was music to the ears of commuters who rely on routes such as the Q56 and Q74 bus lines and the elected officials who represent them.

“This is excellent news for all the constituents in my district, old and young, that rely on the Q74 bus to take them where they need to go,” said Assemblyman Rory Lancman. “The new agreement is very important for Queens, saving it from cuts to vital transit links like the Q74 and avoiding unfair and regressive bridge tolls.”

The bailout agreement doesn’t have support from any Republicans, but as of Wednesday morning Democrats were confident that they have enough party support to approve it. As of press time, the Senate was still “working out the final details” in preparation of a vote, according to Addabbo.