Today’s news:

Paterson sees transit fare hike as last resort

Gov. David Paterson, who has spoken out against a fare hike by the cash-strapped MTA, went on television Tuesday to call the legislature into emergency session to deal with what he called "harsh" financial times.

"Our economic woes are so severe that I wanted to talk to you personally this evening on where we stand," Paterson told New Yorkers. "The fact is that we confront harsh times. Let me be honest, this situation will get worse before it gets better. The time to act is now.'

The governor is just one of a number of elected officials who have objected to any hike in transit fares -— without first exhausting all other possibilities.

New York State Comptroller Thomas DiNapoli has just announced an audit of the MTA's books with a report coming sometime in September. The MTA said it welcomed the audit and would provide full cooperation.

Gene Russianoff, attorney for the transit activist agency Straphangers Campaign, appealed to subway and bus riders to "Let City Hall and Albany hear us loud and clear."

Russianoff said, "City Hall now contributes just seven percent of the cost of keeping the transit system - the engine of our economy - running."

He said New Yorkers must fight for adequate funding for transit.

"It won't be easy but together we can save public transportation if we make sure Albany and City Hall hear us loud and clear," Russianoff said.

Even some MTA board members have expressed opposition to a fare increase and one, Andrew Saul, called for "a fundamental change in the way this place operates."

Saul, an MTA board member representing Westchester County, along with several other board members said the MTA could save millions by consolidating its many sub-agencies and departments.

Saul spoke at the regular monthly meeting of the MTA on July 23 after MTA Chairman Dale Hemmerdinger said he wanted to make it clear the budget the agency presented was only the most preliminary and that no vote was scheduled on anything.

"We wanted to get this plan out to give everybody five months to look it over and discuss it," Hemmerdinger said.

The MTA board must approve a budget in December. It is only then that straphangers will find out whether fares will go up and by how much.

The board would, in the event of a fare increase, be required to schedule public hearings in all boroughs before any increase could take place.

December is also when the Ravitch Commission, a panel appointed by Paterson to come up with solutions to the transit money problems is due to present its conclusions.

The MTA's preliminary budget includes a fare increase - some sources say 25 cents - starting July 1, 2009 and a second increase in 2011, perhaps as early as January. Together, the hikes would add up to 13 percent.

The MTA is largely depending on the New York State Legislature and the Bloomberg administration to provide heavy subsidies to New York City's transit system. Bloomberg has said the city lacks the cash on the scale the MTA says is needed.

Bloomberg last week said transit workers are not paid enough and need a raise.

In any case, the MTA is facing a shortage ranging upwards of $700 million.

The financial crisis is the result of a number of factors, including a cooling real estate market which for years had pumped mega millions into the MTA from a variety of fees on every real estate transaction.

The shortfall is also because of the rising cost of fuel as well as a worldwide building boom which has meant skyrocketing costs of concrete and steel.

One of the most important causes has been the interest coming due from some $22 billion the MTA has borrowed in recent years for its capital program for huge projects like the Second Avenue Subway and the East Side Access to bring Long Island Rail Road trains into Grand Central Terminal. The Capital Fund was starved for state money when former Gov. George Pataki cut off contributions.

New York's newest governor said he would convene the Assembly and Senate Aug. 19 because of the financial emergency — which includes the $700 million budget gap of the transit system.

Reach contributing writer Philip Newman by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 136

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