MTA Bailout Stalled by State Senate

newsday.com/news/local/state/ny-stmta036055964mar03,0,7813762.story

Newsday.com

Senate Democrats stall hopes for state's MTA bailout

BY JAMES T. MADORE

james.madore@newsday.com

March 3, 2009

ALBANY - State Senate Democrats yesterday dashed hopes of an agreement this week on bailing out the MTA, operator of the Long Island Rail Road, New York City Subway and Long Island Bus.

Last night, the transit agency turned over financial records and agreed to provide access to more. The step came hours after Democratic senators said they wanted the MTA audited before voting on a bailout.

The senators will need at least a week to review the additional financial data. And Gov. David A. Paterson had set a deadline of today to resolve the matter so budget negotiations could begin in earnest. Democrats, in charge of state government for the first time since 1935, want a spending plan in place by the April 1 start of the fiscal year.

"We won't have a bill this week but definitely before March 25," said Senate Democratic spokesman Austin Shafran, referring to a scheduled meeting of the MTA board of directors. They have said that without help from Albany they will implement service cuts and steep fare hikes.

Senate Majority Leader Malcolm Smith (D-St. Albans) said, "as a result of this access to a previously unavailable accounting of the MTA's finances, it is now possible for a full vetting ... which will allow us to determine the best course of action to address the MTA's budget shortfall."

Earlier yesterday, Smith said he and colleagues were surprised by the transit agency's acceptance last week of lower tolls on East River bridges, first proposed by Assembly Speaker Sheldon Silver (D-Manhattan). If $2 tolls now are sufficient instead of $5 tolls, Smith said, the MTA's claim of facing a deficit of $3.4 billion through next year was in doubt.

"The question becomes one of a potential audit of the MTA to find out whether their financial standing, as they presented it to us, is real," Smith said.

The bridge tolls, which also will impact Harlem River crossings, are part of a bailout scheme devised by a state commission led by former MTA chief Richard Ravitch. It calls for a payroll tax on employers, and a modest fare increase.

MTA spokeswoman Jeremy Soffin described the agency's talks with Senate Democrats as "productive." The most recent quarterly and annual certified financial statements will be provided "expeditiously," he said.

Still, the bailout faces an uncertain future in the Senate, where Democrats have a one-seat edge over Republicans. And some Democrats, such as Craig Johnson of Port Washington, are opposed to the plan. "I have no confidence in the MTA," Johnson said. "I have concerns about the real need for tolls and a payroll tax."

Senate Minority Leader Dean Skelos (R-Rockville Centre) agreed, predicting his 30-member conference would oppose the bailout, particularly because no provision has been made for improvements to upstate bridges and highways.

Silver said the senators were correct in questioning the veracity of MTA statements. He also said he would press for adoption of a bailout plan by week's end.

Copyright © 2009, Newsday Inc.