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