July 23, 2008

MTA Wants to Accelerate Fare Increases

July 23, 2008
M.T.A. Wants to Accelerate Fare Increases
By Ray Rivera

At a contentious meeting at its Midtown headquarters, the Metropolitan Transportation Authority board provided new details about its plan to plug a gaping hole in its finances. Not only is it seeking an 8 percent increase in revenue from fares and tolls, to take effect July 2009, but it also is requesting an additional 5 percent to take effect by January 2011 — for a cumulative increase of 13.4 percent over 18 months.

In presenting its preliminary budget for the 2009 fiscal year on Wednesday morning, the authority made no attempt to conceal what it considers to be its worst fiscal situation since the economic downturn that followed 9/11. When fares last went up, in March, the authority’s plan was not to have another fare increase until January 2010, with future increases every two years thereafter. Now that entire schedule has been moved forward — by six months for the initial increase and by a year for the projected future increases. (Jeremy Soffin, an authority spokesman, said after the meeting that the 2011 increase might be pushed ahead a few months to get as close as possible to the goal of two years between increases.)

The authority’s leaders said the fare and toll increases are necessary by the confluence of soaring energy prices and a plunge in revenue from real-estate transactions, which are a prime source of the authority’s revenue. The authority is struggling to pay the interest on billions of dollars in debts that have accumulated since the 1980s, but exploded since 2000, to pay for expensive equipment upgrades; debt service alone is expected to consume one-fifth of all authority spending by 2012.

Speaking before a packed hearing room at the authority’s headquarters on Madison Avenue, the authority’s leaders portrayed the plan as difficult and unpopular, but necessary. “Nobody wants to increase the fares,” said H. Dale Hemmerdinger, the authority’s chairman, adding, “We’re human beings, like the rest of you.”

Several board members, however, expressed dissent, saying that despite internal spending reductions already proposed by the authority’s leadership, more should be made before asking riders for more fares and tolls. Some argued that those reductions could be made without affecting service.

“When I look at this budget, I don’t think that we have nearly made the cuts that we need to make,” said Andrew M. Saul, a board member who represents Westchester County. He urged lawmakers to reexamine legislation that he said would restructure the authority and streamline its operations. “There needs to be fundamental change,” he said, adding, “and until that’s done, there’s going to be fare increase after fare increase.”

Several members of the public called for more city and state aid was needed — a position with which several board members are quietly sympathetic, though as political appointees, they have been reluctant to publicly call on the governor and mayor for new assistance.

At least a dozen witnesses brandished signs urging, “Mayor Bloomberg: Help the Riders” and “Governor Paterson: Help the Riders.”

While some board members, like Mr. Saul, called for long-term restructuring of the authority’s finances, others said the authority needed to make cuts urgently.

Jeffrey A. Kay, who oversees municipal operations at City Hall and is one of four representatives of Mayor Michael R. Bloomberg on the board, said, “Before we go out and ask for higher fares, we need to find every dollar we can.”


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