NY subway fares to rise; most service cuts spared

NEW YORK, May 11 (Reuters) - New York subway, bus and commuter rail fares will rise by 10 percent, and most planned service cuts will be spared under a plan approved on Monday by the Metropolitan Transportation Authority.

Subway and bus fares will increase to $2.25, from $2.00, starting on June 28, and the cost of a monthly pass will rise to $89, from $81, Gary Dellaverson, chief financial officer of the MTA, told the transit agency’s board before it approved the increases.

In addition to higher transit fares, tolls on bridges and tunnels will also rise.

A bailout plan by the state last week of the MTA, whose revenues have dropped due to the recession, spared service cuts that would have included two subway lines and 21 bus routes, and staved off threatened fare hikes of 20 percent to 30 percent.

But the MTA, the nation’s biggest transit agency with 9 million daily riders, still must find $200 million of savings. Though no union workers will be laid off under the approved plan, train-clearing and station agent jobs will be lost through attrition.

One board member warned that trains will be cleaned less often and cutting subway station agents risks higher crime.

Board member Andrew Albert, criticizing the prospect of dirtier stations and more crime, said removing the agents was “a huge mistake.”

Gene Russianoff, a transit advocate with the Straphangers Campaign, said the agents were “the eyes and ears of the system,” adding fare evasion would rise and the public would lose people who can give directions and call for help.

MTA Chairman H. Dale Hemmerdinger vowed to make the best of the bailout, though he said: “Who can be happy about raising fares, who can be happy about letting people go?”

Hemmerdinger, speaking to reporters, said Governor David Paterson had asked him to stay on until he decides on the agency’s leadership.

The Senate, as part of the bailout plan, merged Hemmerdinger’s job with that of the chief executive officer, and clipped Hemmerdinger’s appointment to 30 days.

Paterson, vowing last week to clean up the agency which he said has lost the public’s trust, accepted the resignation of Elliot Sander, the chief executive officer, effective May 22.

Several board members who rejected the plan said a new payroll tax for the MTA unfairly penalized the suburbs.

Set at 34 cents per $100 dollars, this tax should raise $1.5 billion a year and be more stable than the real estate and other taxes that have slid during the recession, said Dellaverson.

A 50 cent surcharge on taxi rides and other driving-related fees should raise another $318 million a year, he added.

Even with the new revenues, the fares and tolls will have to rise 7.5 percent in 2011 and in 2013, under the new plan. (Editing by Leslie Adler)