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UPDATE 1-NY transit agency hikes subway fares, cuts service

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NEW YORK, March 25 (Reuters) - New York state’s transit authority approved a plan on Wednesday that will raise subway, bus and suburban train fares by 20 to 30 percent and cut service in a move to close a $1.2 billion deficit.

The plan approved by the Metropolitan Transportation Authority will also raise tolls on Manhattan’s bridges and tunnels.

Several board members, who noted the legal requirement to close the deficit, said they still hoped the state would cobble together a revenue plan that would allow the fare hikes and service cuts to be rolled back.

There is no “drop dead deadline” after which the cuts and fare hikes cannot be rolled back, the board members said, when asked how much time the state has to enact a rescue plan.

MTA Chief Executive Lee Sander warned that the fare hikes and severe service cuts might not be enough to see the agency through the economic downturn, which has caused the agency’s share of real estate and fuel taxes to decline.

“We may have to reforecast our annual revenues (soon) to identify further savings in the light of hundreds of millions of dollars of deficits,” Sander said.

Under the plan, bus and subway fare in New York City will rise 50 cents to $2.50, starting as soon as June 1, while ticket prices for suburban rail commuters will rise as soon as May for those who buy tickets over the Internet, officials said.

Hundreds if not thousands of transit workers could be laid off, including subway station attendants.

Although tolls on bridges and tunnels were raised, the bridges over the East and Harlem rivers will remain free. (Reporting by Joan Gralla; Editing by Leslie Adler)