MTA to propose 25¢ fare hike for next year

By Philip Newman

The Metropolitan Transportation Authority, facing one of the worst financial outlooks in the agency's history, is proposing a hike in bus and subway fares for a second consecutive year.

The possible addition of a quarter to the basic fare of $2 would be only the second time in the 104 years of the subway that fares have gone up in back-to-back years.

Whatever the fare hike, it would take effect a year from now in July 2009.

MTA Executive Director Elliot Sander was scheduled to present the 2009 budget, including the fare increase, to the MTA board at its monthly meeting this week.

The MTA's budget has a shortfall of about $700 million, a situation attributable to a number of causes, including the rising cost of fuel, a free-fall in revenues from a sizzling real estate market that has now cooled and interest coming due from prodigious borrowing for projects such as the Second Avenue subway and the East Side Access.

The borrowing of nearly $23 billion by the MTA for the mega projects was made necessary because of a shortage in its capital plan due to a cutoff of cash from the administration of former Gov. George Pataki.

The costs of the huge projects have been rising due to a worldwide construction boom that has boosted the cost of steel 82 percent and concrete by 21 percent, MTA Chairman Dale Hemmerdinger told a board meeting earlier this year.

The MTA is required by law to hold a series of public hearings before fares can be raised. They would probably be set for February or March next year.

Transit sources said it was imperative that the MTA raise revenue from fares by 8 percent, which would bring in more than $400 million annually.

Transit officials are holding out hope of getting at least $300 million from the administration of Mayor Michael Bloomberg and the state Legislature.

Although nearly 100 members of the state Assembly and Senate signed an appeal to the MTA last winter to hold off its last fare increase by pledging that the Legislature would contribute enough to make the fare increase unnecessary, but the body has yet to show any such enthusiasm for the latest proposal.

The precedent for a fare increase two years in succession was set in 1980-81.

The basic fare of $2, which only 14 percent of straphangers pay, was maintained last year with transit officials raising the cost of unlimited ride MetroCards.

The proposed fare raise would also take effect on the Long Island Rail Road and Metro-North Commuter Railroad as well as bridges and tunnels operated by the MTA.

Some transit sources said the MTA wants the city to increase its contribution to the Access-a-Ride program that provides transportation to the disabled and ask the city and state to pay more to free MetroCards for schoolchildren.

Reach contributing writer Philip Newman by e-mail at jwalsh@timesledger.com or by phone at 718-229-0300, Ext. 136.

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