Panel to suggest smaller MTA fare hike

December 3, 2008 8:24:22 PM PST
New York Governor David Paterson a panel examining the Metropolitan Transportation Authority's finances will recommend slashing a proposed fare hike but imposing a new business tax to help the transit agency plug a giant budget gap. Paterson, at a news conference Wednesday afternoon, said he is "quite pleased with what I see so far" in the report by the Ravitch Commission, headed by former MTA chief Richard Ravitch.

The governor said he is still looking through the report, and aides said it would not be released until Thursday.

A news conference involving Gov. Paterson, Mayor Michael Bloomberg and Ravitch was scheduled for 11:00 Thursday morning.

But Paterson did reveal that the report calls for just an 8 percent fare hike. He said the Ravitch report achieves that "by distributing the responsibility among all those who use the service."

He said the report suggests "combining of services and obviously some reduction in the administrative part of the MTA."

A key part of the report recommends other hikes to lessen the burden on MTA riders. The recommendations include new tolls on bridges spanning the East and Harlem rivers and a new payroll tax for downstate employers.

Eyewitness News has learned the payroll tax would be 1/3rd of 1 percent, or 330 dollars of every 100,000 of payroll. The tolls on the East River bridges would be $5.00 or $4.15 for EZPass. In addition to the service consolidations and management restructuring mentioned before, the report calls for improvements in bus service and savings in the way long term projects are managed.

One combination of services would be the creation of an "MTA Regional Bus Authority" to oversee Nassau County's Long Island Bus, Suffolk County Transit and Westchester's Bee-Line bus system.

That one regional bus authority would eliminate the need for administrative overhead for all three.

All of those options were mentioned in a speculative comment that Paterson made, although he did not specifically commit to any of them.

But when directly asked about the possibility of a payroll tax for downstate employees, Paterson said: "As an alternative to a fare hike, I think it's very viable."

It was the first time that Paterson, who has repeatedly rebuked calls to increase taxes to soften the blow of his proposed deep budget cuts, has shown support for some sort of a new tax.

Given the MTA's financial predicament, the riders' advocacy group Straphangers Campaign could accept another small fare increase if it were coupled with a payroll tax or other new, ongoing source of transit money, group spokesman Gene Russianoff said.

"Which door would you choose? The one with the whopping fare hike and the brutal service cuts or one that raised revenue for the system?" he said.

But Greater New York Chamber of Commerce President Mark S. Jaffe said neither businesses nor commuters could afford to pay more for mass transit.

"Right now, people are suffering," said Jaffe, whose group has about 2,000 members.

A payroll tax for transit would require approval from the state Legislature, where the concept is getting a mixed reaction.

Democratic State Assembly Speaker Sheldon Silver has said he's open to raising taxes or creating a new tax to support the MTA. But Senate Democratic Leader Malcolm Smith - poised to become majority leader next month if he secures the votes of Democratic dissidents - said in a statement Wednesday that "now is not the time to raise taxes."

Republican State Sen. John Flanagan, a member of a board that reviews the MTA's capital spending, said a payroll tax would be ill-timed.

Silver, Smith and Paterson are from New York City, and Flanagan from Long Island.

Gov. Paterson created the Ravitch Commission in February and charged it with brainstorming new funding sources for the cash-strapped MTA, which faces a $1.2 billion budget shortfall next year.

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WEB PRODUCED BY: William King, Bob Monek and Mark Crudele.

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