“Doomsday” Derailed: MTA Bailout Plan Passes

The state Legislature on Wednesday approved a $2.26 billion bailout of New York City's mass transit system, helping to limit subway and bus fare increases to only a quarter.

The bailout package allows the Metropolitan Transportation Authority, which runs the system, to hike fares by only about 10 percent, from $2 a ride to $2.25.

The MTA had been threatening an increase of up to 30 percent to help cover massive budget deficits.

The bailout also softens the increase on the cost of a monthly fare pass, from $81 to $89, and adds a 50-cent charge for taxi rides, among other fees. The plan includes a payroll tax on businesses but no new tolls.

Some commuters, cab drivers, transit advocates and politicians said Wednesday they were unimpressed and even disgusted with the financial bailout deal, but many expressed relief that the base subway fare would increase by only 25 cents.

“It's something you have to adapt to, you know what I'm saying? An apple doesn't cost a nickel anymore,” said Larry Taylor, who commutes by subway from the Bronx, as he stood at a table on a street near Manhattan's Penn Station selling DVDs.

The bills were passed just over 24 hours after a closed-door deal among Democratic leaders because Gov. David Paterson suspended the usual three-day waiting period designed to give lawmakers and the public time to review proposed legislation.

Republicans in the Democrat-controlled Senate criticized the bailout, saying it breaks with a 13-year tradition of splitting New York City transportation aid with the rest of the state. Sen. Dean Skelos, a Long Island Republican, said the payroll tax will kill jobs outside the city, where there is little benefit from city transit.

The GOP minority also argued that the bailout consumes money that was supposed to go to road and bridge projects upstate and on Long Island.

The bailout raises $1.5 billion from the payroll tax, of which $400 million will be put toward capital funding. That $400 million will be collateral so the state can borrow about $6.5 billion in bonds over the next two years to start the capital plan.

The state will reimburse school districts an estimated $60 million in next year's budget for what the schools will have to pay out in payroll taxes. Tax revenues will go toward capital, and fare hikes will be used for operations.

The state-created MTA, which has an annual budget of about $11 billion, also runs the Metro-North Railroad and Long Island Rail Road, the Long Island Bus system and several bridges and tunnels. The systems carry more than 8.2 million riders on an average weekday and more than 300 million vehicles a year.

The MTA has blamed the economic downturn for a $1.2 billion budget deficit. The bailout was intended to avoid the threatened double-digit fare increases, service cuts and layoffs. It includes 7.5 percent increases in fares and tolls in 2011 and 2013, Assembly Speaker Sheldon Silver said.

Transit rider Dwight Tjornham, a butler from suburban Mount Vernon, was waiting for a Metro-North train on Wednesday at the White Plains station. He noted it was 3 minutes late.

“I'm happy to pay a 10 percent fare increase if we get 10 percent better service,” he said. “I don't suppose they'll take 3 minutes' worth off the fare.”