(Newsday posted the following article by Joie Tyrrell and Joshua Robin on its website on April 24.)
NEW YORK — In heated exchanges yesterday, the state comptroller accused the Metropolitan Transportation Authority of concealing half a billion dollars to justify a fare hike while MTA officials countered they have become victims of a political witch-hunt.
In the wake of separate press conferences in Manhattan, some Long Island Rail Road riders and politicians questioned the MTA’s need for a 25 percent fare increase and a subway fare hike, starting next month.
“Until the MTA can explain its finances, there shouldn’t be a fare increase,” said Assemb. Richard Brodsky (D-Westchester), who chairs an Assembly committee that oversees the Metropolitan Transportation Authority.
“It seems like they have been hiding a lot of stuff,” said Kristine Parrinelli, who gathered hundreds of signatures on the Port Jefferson line earlier this year against a steep fare hike. “They definitely didn’t need that much.”
After three months of analysis, state Comptroller Alan Hevesi and his city counterpart, William C. Thompson, found that the MTA had a surplus of more than a half-billion dollars in future budgets that could have been used to offset or minimize the fare hikes. They accused the agency of compiling two sets of books: one for private use and one for the public.
“The MTA has misled the public,” Hevesi said yesterday, calling the agency’s financial reporting “incomplete, misleading and obfuscating.” Hevesi said the increases may or may not have been necessary this year, but said debt payments due next year would make higher fares in 2004 unavoidable. Both he and Thompson said they had not uncovered any criminal action.
But MTA Chairman Peter Kalikow strongly denied any wrongdoing. “Men like Mr. Hevesi, who use their political office – their public office – for political gain are not going to stop us,” Kalikow said.
He called the state comptroller’s report a “cynical political document aimed solely at undermining the MTA’s credibility by capitalizing on the public’s natural dislike of a fare increase.”
Kalikow said the MTA’s finances had been examined and approved by independent auditors, Deloitte & Touche.
Hevesi’s audit alleged that the MTA kept two sets of books, leaving the public and politicians with “a distorted picture created by the MTA to make it easier to push through an increase.” Kalikow denied the agency kept two sets. He said they merely kept one for large items and another for “minutiae.”
Hevesi said he got the internal books by subpoena and said they showed the agency moved $512.5 million from its 2002 accounts into the books for 2003 and 2004. As a result, a potential 2002 surplus of $537 million shrank to $24.6 million, according to the audit.
The MTA had said earlier this year it faced massive deficits as it pushed to raise LIRR tickets as well as hiking subway fares from $1.50 to $2.
Kalikow said the agency had not hidden any revenues, and in fact had to raise fares because its recurring revenues are less than its expenses. MTA officials disputed the comptroller’s numbers, but said the agency recently did save $630 million by taking advantage of lower interest rates under a massive debt restructuring.
They said that after much internal debate, the authority decided to split the $630 million into the budget for 2003 and 2004 under the assumption that if the entire sum was loaded into the 2003 budget, commuters might face a larger fare hike a year later if the economy continued to soften.
“The comptroller is arguing that the MTA should have simply spent the money as soon as it was realized to delay the date of the fare increase,” Kalikow said. “Had the comptroller’s suggestion been adopted, the 2004 increase would have been twice as large, a fact he conveniently omits.”
State Sen. Dean Skelos (R-Rockville Centre), a member of the MTA capital review board, said he expects state legislators will examine both sides.
“My job and I’m sure other members of the Legislature is going to be to look at both reports and see who’s telling the truth,” Skelos said.
The new fares go into effect for the railroad on May 1, though monthly tickets for May have been on sale since Sunday. The new subway fares go into effect May 4.
City officials are pressing the MTA to delay the fare hikes, but Kalikow angrily rejected their demands. “The commuters did not get a fair shake from the MTA,” said Peter Haynes, president of LIRR Commuters Campaign. “But I would be shocked if there was any reductions or refunds from the fare hikes.”
Former LIRR Commuters Council Chair Larry Silverman called into question the validity of public hearings held by the MTA prior to enacting the fare hike. Of the 10 public hearings, two were on Long Island.
“If the facts for the hearing were inaccurate, then the validity of the federal hearing itself is in question,” Silverman said.
Hevesi advocated widespread changes, including giving the state comptroller veto power on fare hikes. The board is largely controlled by appointments by Gov. George Pataki.
Several transit advocates said the MTA must act to restore commuter’s confidence.
“Personally, I’m uncomfortable. Something has to be done to clear this all up,” said Gerry Bringmann, vice chairman of the LIRR Commuters Council. Bringmann also said it was too late to hold off on a fare hike because monthly tickets have already been sold.
“To rescind it would be a mess,” he said. “But maybe if they raise it 25 percent this month, maybe in a couple of months, they could drop it if it comes out that this wasn’t needed.
“It is kind of scary we came to this place. There should have been a safeguard.”