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Hallelujah - for Now

by Gene Russianoff, May 19, 2003
 

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When the Straphangers Campaign joined riders, workers and elected officials to sue the Metropolitan Transportation Authority, we thought we had a good chance of winning a finding that the MTA had misled the public. But we didn't know if the court would order a rollback of the $2 fare.

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But on May 14 Manhattan State Supreme Court Justice Louis York ordered the Metropolitan Transportation Authority to roll back the fare increases on city subways and buses, the Long Island Rail Road, MetroNorth and Long Island Bus by May 28 and to hold a new round of public hearings. The judge also halted the closing of 62 subway station booths.

My reaction is simple and like that of virtually all riders: Hallelujah!

Even though the order is now on hold as the MTA appeals it, the May 14 decision is a victory for truth in government. [See related story on the MTA hearing process.]

The Straphangers Campaign, New York State Senate Minority Leader David A. Paterson and several transit riders filed the suit last month, after State Comptroller Alan Hevesi and City Comptroller William Thompson found that the MTA had misled the public about the state of the authority's finances. Transport Workers Union Local 100 President Roger Toussaint has also intervened on the side of the plaintiffs.

We argued that the authority violated the law when it voted to raise the fare on March 6 because it did not follow the required process. Under the law, public hearings must be held before the MTA can approve any fare hike. But at the hearings in February, the MTA deliberately deceived the public about the state of its finances. For example, the MTA's posters announcing the hearings all said that the authority was facing a $2.8 billion budget gap in the next two years.

That is simply not true. According to Hevesi's affidavit in the suit, the MTA, moved resources off budget and from one year to another. That had the effect of grossly reducing the projected size of the 2002 surplus from $537.1 million to $24.6 million. Concealing this money bolstered the MTA's claim that it faced huge deficits. Without these actions, the MTA's surplus in 2003 would have been $83 million, according to Hevesi. These deceptions on the part of the MTA made a sham of the hearings.

The comptrollers also said the MTA hid its financial gyrations from the public. Astoundingly, the main argument of the lawyers for the MTA was that the MTA has no legal obligation to disclose financial information to the public.

In his ruling, Judge York roundly rejected this contention. "The right to a public hearing and to public scrutiny are based on the principle of fundamental fairness, which is required of all government agencies . . . when dealing with citizens of the state or their affairs."

In addition to the controversy over finances, serious questions have been raised about the independence and vigor of the MTA inspector general. On May 14, the authority fired two security officials saying they had falsified information. The two have charged the agency with corruption and graft.

The MTA faces its worst crisis of public confidence in its 35-year history. Whatever the fate of the $2 fare, the decision should force sweeping changes in the way the MTA reports its finances.

The very day of York's ruling, the authority announced changes that it said would better inform the public about its finances. Among the modest reforms, the MTA says it will give the public more time to comment on its proposed budgets, issue a four-year plan that it will revise three times a year, and provide more financial information on its web site. Katherine N. Lapp, the executive director, said the changes were not a response to the many recent criticisms of the MTA.

The state legislature is considering a range of reforms, including an Independent Budget Office for the MTA, a computerized registry for MTA contracts and more independence and clout for the MTA inspector general. Many of the most important changes are in a bill sponsored by Assemblymember Richard Brodsky. The legislature should act on these ideas.

Governor George Pataki, Mayor Michael Bloomberg, the state legislature and the MTA need to take immediate action to restore the MTA's credibility. Pataki should appoint an independent blue ribbon panel -- known under state law as a "Moreland Act" commission -- with subpoena power to investigate the MTA's budgeting and finances, as well charges of corruption in the agency's contracting. Bloomberg should use the city's considerable resources to audit the MTA's finances and to call off his proposal to slash city payments to the MTA.

We won our lawsuit because the MTA misled the public about its finances and made a sham of public hearings. If the MTA learns from its mistakes, the actions could usher in a new era of open government at the transportation agency.

Gene Russianoff is senior attorney with NYPIRG/Straphangers Campaign.

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