Senate Reaches Tentative Deal in MTA Bailout, But the Devil Is in the Details

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New York Senate Majority Leader Malcolm Smith says his Democratic caucus has a "framework" for an agreement on Governor Paterson's MTA rescue plan that would minimize fare hikes and service cuts. Last night he met with Long Island senators Craig Johnson and Brian Foley, who had been holding out on the plan.

Foley says one of the things that won him over was Smith's insistence on better oversight of the MTA, including a financial audit.

FOLEY: "If an when the forensic audit is completed, which will show the real expenses and real revenues for the MTA, that then we're gonna be able to make additional adjustments to the payroll tax and other payments that go to the MTA."

Foley and Johnson had been holding out primarily over the payroll tax in Paterson's plan. The governor has sought to placate suburban lawmakers with a proposal to reimburse school districts for the tax. It's not clear if they will instead push to exempt schools from the tax entirely.

Others, including Mayor Bloomberg, complain that though Paterson's plan would avert fare hikes and service cuts, it does nothing to address the agency's long-term capital needs. Paterson says the legislature may take up the capital plan later this year.

PATERSON: "The capital plan is not the issue if you are going over the bridges and the tolls are going up 30 percent, and if you live in a place where there'll be no service at all -- which is going to be the case if we don't address it -- that is the most immediate problem."

The MTA board approved increases ranging from 23 percent to 30 percent, but agreed to shelve its plan if the bailout is approved. Under the bailout, the fares would still rise about 8 percent on average, but layoffs and service cuts would be avoided.

A $1 fee per taxi ride has been cut to 50 cents. That would fund what Smith called a "modest" capital improvement at the MTA. A proposal for another 50 cents per trip to leverage about $1 billion in aid for bridge and highway work upstate and on Long Island was dropped, but Smith said it will be reconsidered in October when a full MTA capital plan is devised.

The proposal now goes to the Democrat-led Assembly where it is likely to be approved despite some concerns. All 30 Republican senators have said they are opposed to the bailout proposals, meaning Smith will need every Democrat in his 32-30 majority.