N.Y. Transit Fare Increases to Get Review in Court

New Yorkers are bracing for a 33% fare hike on city subways and buses that is scheduled to take effect this weekend. But in the face of mounting political protests and legal opposition, a judge announced Thursday that he will hold a hearing next week to decide if the $2 fare should be rolled back.

During a contentious hearing, Manhattan Supreme Court Justice Louis York said he needed more information before ruling on a request for an immediate freeze sought by the Citizens’ Straphangers Campaign, an activist group.

In a lawsuit filed this week, the Straphangers group alleged that the Metropolitan Transportation Authority had deliberately misled the public by claiming it had a $2.8-billion deficit this year, instead of an $83-million surplus. The lawsuit asked that the court delay the fare increase in the nation’s largest public transportation system until a new round of public hearings can be held.

“We’re going to get all the facts out in the open, and the judge has promised us that chance next week,” Gene Russianoff, the Straphangers’ attorney, said in a news conference outside the courthouse.

Gregg Mashberg, an MTA attorney, dismissed the charges as “baseless,” even though he conceded that the agency may not have fully explained its financial situation to the public. Earlier, Peter S. Kalikow, the agency’s chairman, insisted that a fare increase was justified for the system’s 7 million daily riders. If the agency had not approved a fare increase in 2003, he noted, it would have been compelled to endorse a 50% increase in transit fares next year, because of mounting budgetary pressures.

New York Gov. George E. Pataki, who appoints all 17 voting members of the MTA board, has not commented on the controversy.

The dispute erupted last month after New York State Comptroller Alan G. Hevesi and New York City Comptroller William C. Thompson Jr. released audits of MTA finances. Both officials charged that the agency had not leveled with the public about the true state of its finances, pointing to at least $600 million in surplus funds that were not disclosed during public hearings over increasing the fare to $2 from $1.50.

The court wrangle did not affect about 400,000 daily riders on the Long Island Rail Road and Metro-North rail lines, whose MTA-approved 25% fare increases went into effect Thursday as scheduled.

“The MTA said very little in court today that rebuts the bottom-line truth that they misled the public, that they told us they had a deficit in 2003 when in fact they actually had a surplus,” said State Sen. Eric Schneiderman, a Manhattan Democrat.

If the increase is upheld by the court, New York and Philadelphia would both have $2 transit fares -- the nation’s highest.

The fare increase -- the first for New York since the MTA raised the fare 25 cents in 1995 -- was approved in March during public hearings dominated by the MTA’s gloomy budget forecasts. Kalikow and other officials said that they were strapped for cash, and that an increase was all but inevitable.

The MTA has also approved fare increases for the Verrazano and Triborough bridges and the Brooklyn Battery and Midtown tunnels. Those increases, which make one-way fares as high as $4, are set to take effect in two weeks.

As controversy has grown over the fare hikes, MTA officials have conceded they did not spell out clearly enough the reasons why the agency spent $630 million in surplus funds to pay off future debt instead of using it to balance the 2003 budget.

Nevertheless, Mashberg said the agency has “every legal right” to approve a fare increase and need not give the public “every last detail of its financial condition.”

Kalikow said he will recommend that two new members be appointed to the MTA’s governing board, including representatives of the riding public and transit workers. He also said the agency would report its financial condition more candidly.