(The following Associated Press story appeared on the New York Times’ website on April 24.)
NEW YORK — A state official has called for a review of fare increases for New York’s subway and bus systems following allegations that the transit agency hid more than half a billion dollars while it lobbied for the rate hike.
In a pair of scathing reports, comptrollers from the state and city alleged that the Metropolitan Transportation Authority moved surpluses from its 2002 accounts onto the books for 2003 and 2004, making the authority’s financial picture look worse than it was.
The public and politicians were left with “a distorted picture created by the MTA to make it easier to push through an increase,” state Comptroller Alan Hevesi said.
MTA officials deny the charges. Far from concealing funds, they said, the agency decided after a difficult debate to use the money to pay off debt and minimize future fare increases.
The allegations add to the burgeoning accusations of improprieties at the agency. “They should review the fare increase,” said rider Nina Swidler as she bought a fare card at Lincoln Center.
“The MTA’s facing the worst crisis it’s had in terms of public confidence in its 35-year history,” said Gene Russianoff, a lawyer for the riders’ watchdog group, the Straphangers Campaign.
Rep. Jerrold Nadler, a Manhattan Democrat, called for a suspension of the fare hike, scheduled to take effect next week, until an independent commission can determine whether the increase is needed.
MTA Chairman Peter Kalikow called Hevesi’s report “outrageous” and “a political document filled with lies, half-truths and innuendoes.” He said the fare increase would not be reconsidered.
The MTA had repeatedly said it faced massive deficits while it was arguing for the fare hike. The approved changes raise one-way bus and subway rides by 50 cents to $2. They also increase commuter rail line fares and tolls at bridges and tunnels.
Hevesi said the increase may or may not have been necessary this year, but debt payments due next year would make higher fares in 2004 unavoidable.
Hevesi said his audit found that the transit agency in effect used two sets of books — one public and another for internal use. Agency officials disputed the accusations, saying their books have been certified by independent outside auditors and that they would provide a detailed rebuttal Thursday.
Hevesi said he got the internal books by subpoena and said they showed the agency had moved $512.5 million from its 2002 accounts onto the books for 2003 and 2004. As a result, a potential 2002 surplus of $537 million shrank to $24.6 million, the audit says. Similar accounting moves turned a 2003 surplus of $83 million into a $236 million deficit, Hevesi said.
A separate, city audit of NYC Transit — which runs bus and subway service under the MTA — found that agency misclassified more than $850 million in capital spending and debt service as operating expenses for the 2001 fiscal year.
Hevesi, a Democrat, called for the Legislature to make future hikes contingent on his determination that MTA financial plans are accurate and reasonable.
Russianoff said Republican Gov. George Pataki, who appoints the majority of the authority’s members should create an independent board to investigate the MTA.