NYTimes.com Article: Judge Orders Fare Increases Rescinded for New York City

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Judge Orders Fare Increases Rescinded for New York City

May 15, 2003
By RANDY KENNEDY






A State Supreme Court judge in Manhattan ordered the
Metropolitan Transportation Authority yesterday to rescind
the transit and commuter fare increases that were approved
two months ago, ruling that the authority violated state
law by misleading the public about its finances.

But the decision does not mean fares will be rolled back
immediately - and if they are rolled back, it may not be
permanent. The authority said it would appeal, and even if
the ruling is upheld, the M.T.A. could vote again for
higher fares.

The judge, Louis B. York, found that 10 public hearings
held by the authority in February to solicit riders'
opinions about the proposed fare increases were "based on
the false and misleading premise that the M.T.A. was in
worse financial condition than it knew itself to be."

Notices for the hearings, posted in hundreds of subway
stations and at bus stops, said the authority faced a $2.8
billion shortfall over the next two years. But Justice York
called that a "fictitious gap," and added that the
misinformation "had a chilling effect on the public,
discouraging an open and complete discussion of the
proposals and foreclosing the presentation of creative
alternatives."

In the end, he wrote, the actions "undermined the public's
confidence in the M.T.A."

Tom Kelly, the authority's chief spokesman, declined
yesterday to comment in detail on the decision, saying only
that the authority disagreed with it and would appeal.

At least for the next two weeks, riders will continue to
pay the higher base subway and bus fare of $2. Justice York
said he would allow the authority that amount of time to
roll back the fares - a much more complex job in the age of
the MetroCard. Lawyers for the Straphangers' Campaign, the
riders' advocacy group that filed the suit, also said they
expected M.T.A. officials to appeal immediately, leading
most likely to a hearing today before the Appellate
Division of State Supreme Court in Manhattan.

In the end, even if the suit is successful, it will require
the authority only to hold new public hearings, based on
more accurate information. The authority, which has broad
powers to determine fares, could vote to keep the increase
in place.

But lawyers for riders said yesterday that they considered
the case much more about the principle of public
accountability, and as such they saw the ruling as a huge
victory.

The winning side seemed almost taken off guard by the
decision. "I'm happily surprised," said State Senator David
A. Paterson of Manhattan, an originator of the lawsuit who
was also listed as a plaintiff.

Since the momentum for a fare increase began to build
rapidly last November, shortly after the re-election of
Gov. George E. Pataki, the authority's top officials have
been widely criticized as being deceptive about the depth
of their financial problems. No one has disputed that there
are problems, as the system's operating expenses have
increased and revenue has not kept pace.

But many public officials questioned how the authority
ended 2002 with a very small surplus when it had appeared
earlier that it would end the year in much better shape.

The authority's top leaders repeatedly, and often angrily,
rebuffed the criticism. They argued that they had
adequately explained how the arrangement of their finances
led to a deficit of more than $200 million in 2003. They
added that they had given the public more information than
any prior M.T.A. administration.

While the authority initially said it had a $2.8 billion
deficit over two years, it later said it had been able to
reduce that gap to about $1 billion: the more than $200
million in 2003, and the rest in 2004.

But highly critical reports from both the city and state
comptrollers last month accused the authority of
essentially creating the appearance of a more pressing
deficit by shifting money from 2002 to 2003 and 2004.

More damningly, the comptrollers accused the authority of
working hard to conceal that fact. In court over the past
two weeks, the authority's lawyers never directly disputed
that accusation. Instead they argued that state law gave
them no obligation to provide a completely detailed
accounting to the public.

Gregg M. Mashberg, a lawyer representing the authority,
said that the public hearings were not meant to be a
"working session" with the public and added that the M.T.A.
was not compelled by law to present "a financial plan it
was not considering."

But in his decision, Justice York ruled that the authority
did not simply withhold details. It presented inaccurate
information, he wrote. Previous cases have established
that, under the Public Authorities Law, while the M.T.A.
has the power to set fares, that power is subject to
"certain safeguards" and can be exercised only "after a
public hearing."

If the court did not enforce the implicit requirement that
those hearings be based on accurate information, Justice
York wrote, "then it would greatly diminish the value of
one of these crucial safeguards."

He added: "If this court did not declare the notice and the
vote invalid, it would exacerbate the harm - and undermine
the public's confidence in the judiciary as well."

State Senator Eric T. Schneiderman of Manhattan, one of the
lawyers for the Straphangers Campaign, said after the
ruling that it sent "a strong message to every public
authority in this state that they are accountable."

Whether that victory will translate into riders eventually
keeping more money in their pockets is far from certain. In
1995, the last time fares were increased, to $1.50, a civil
rights suit by the Straphangers to stop increases was
unsuccessful. The suit claimed that the increases were
racially discriminatory because fares for the subway and
bus - most of whose riders are black or Hispanic - rose
more steeply than fares for suburban commuter rail lines,
most of whose riders are white.

A federal judge in Manhattan blocked the fare increase
before it went into effect. But a federal appeals court
disagreed, and in a settlement before a trial, the fare
increase was allowed to stay in place.

http://www.nytimes.com/2003/05/15/nyregion/15FARE.html?ex=1054014968&ei=1&en=4178f6e0a64945da


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