A state panel will recommend slashing a proposed fare hike but imposing a new business tax to help the Metropolitan Transportation Authority plug a giant budget gap, state officials said Wednesday.
The report -- a potential alternative to the MTA's own plan for drastic fare increases and service cuts -- was to be released Thursday.
The chairman of the commission examining the MTA's finances, Richard Ravitch, declined to comment Wednesday, but Gov. David Paterson said the recommendations include an 8-percent fare increase.
The MTA last month proposed raising fare revenue 23 percent to help close an estimated $1.4 billion deficit in its operating budget next year and a $3 billion deficit by 2012.
A state official familiar with the commission's suggestions said they also include a payroll tax on businesses; it's unclear what the rate might be or whether it would apply statewide. The official spoke on the condition of anonymity because the report hadn't been released.
The commission also called for cutting administrative costs and "some combining of services," Paterson said, without giving details. The MTA has proposed cutting 2,700 jobs and eliminating bus and subway lines that overlap with other lines or have relatively few riders.
News reports have said the state panel's recommendations might also include adding tolls on now-free bridges across New York City's East River.
The MTA did not immediately respond to a request for comment Wednesday.
Paterson said he was "quite pleased with what I see so far" in the report from the Commission on Metropolitan Transportation Authority Financing, which he appointed in June.
"We are in a very difficult fiscal time, and so it's either going to be fare hikes, or it's going to be tolls and a combination of payroll taxes," the governor said at a news conference.
The MTA is required by law to balance its budget, which includes $1.5 billion a year in payments on $27 billion borrowed to rebuild the long-neglected transit system.
Paterson, a Democrat, has ruled out increasing income taxes to fill government deficits. But he called a payroll tax "very viable" as a way to offset higher MTA fares.
It's unclear how any fare increase would be calculated across the transit system's various rates. A single bus or subway ride is now $2, an unlimited one-day pass $7.50 and an unlimited monthly pass $81.
Monthly and weekly fares went up in March, as did rates on the agency's commuter railroads and tolls on many of its bridges and tunnels.
In the months since, the deepening economic crisis has taken a toll on the MTA, but also on many of its riders, who are concerned about facing rising costs amid the economic downturn.
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.
The MTA's transit system carries more than 8.2 million riders on an average weekday. More than 300 million vehicles a year use its bridges and tunnels.