Today’s news:

City Council may demand MTA hold transit fare hike

City Councilman John Liu (D-Flushing) has called an emergency meeting Thursday for a vote on a resolution demanding that the MTA postpone the transit fare hike in face of two audits that concluded the agency manipulated its books to justify the biggest increase for subway and bus riders in the city’s history.

The chairman of the Council’s Transportation Committee said the panel would address the audits conducted by state and city comptrollers that found the Metropolitan Transportation Authority hid surpluses to make a case for the 50-cent boost in transit fares from $1.50 to $2, which is to take effect May 4.

“The two independent audits raise questions as to why the MTA voted a fare increase at this time, when people are struggling so much,” Liu said.

He had long demanded that the MTA hold off putting any fare increases into effect and had asked the agency to delay its vote on fare hikes pending the comptrollers’ audits.

“Our review process proves that in fact the MTA has a culture of secrecy, arrogance, lack of accountability and contempt for the public,” New York State Comptroller Alan Hevesi told an April 23 news conference in Manhattan.

He was joined by William Thompson as the two reported on separate audits each had conducted of the MTA books.

Hevesi said the MTA maintained two sets of books, one for public consumption and another which “they kept to themselves,” and he accused the agency of hiding $512 million to make it seem that it was so broke that it had no choice other than to raise transit fares.

“It is an outrage that this public agency blatantly misled the people it is supposed to serve,” Hevesi said. “There is no allegation here of criminality. There is an allegation of reprehensible behavior and deceit.”

Both Hevesi and Thompson did say, however, that a fare increase most probably would have been needed in 2004.

Liu said the Council Transit Committee would vote on two resolutions Thursday. One demands that the MTA delay any fare increase, while the other calls for the state comptroller to review any future fare increase before it can be implemented and gives the comptroller veto power over future increases.

MTA Chairman Peter Kalikow angrily denied and denounced the audits, saying they were politically motivated. Kalikow said the MTA had been doing its best on behalf of the transit riding public.

“Men like Mr. Hevesi, who use their political office — their public office — for political gain are not going to stop us,” Kalikow said.

Hevesi, a Forest Hills Democrat, was elected state comptroller in 2002 after serving several terms as city comptroller and following a failed bid for the mayorship. Kalikow said Hevesi’s report was “a political document filled with lies, half-truths and innuendos.”

Hevesi testified Tuesday before the state Assembly Standing Committee on Corporations, Authorities and Commissions in Albany that the MTA had “lost the public’s trust.”

Hevesi said the state comptroller should have the authority to require the MTA to disclose details of its budget and financial plans that would restore public confidence. He also called on the Legislature to stop the MTA from enacting any more fare or toll increases until the state comptroller reviews the MTA’s financial data.

Kalikow said the MTA’s financial records had been certified by the independent accounting firms.

Thompson said the MTA misled the public with incomplete financial reports and he said the audit “disclosed that New York City subway and bus riders pay a much higher percentage of the MTA’s operating expenses than those who ride the commuter railroads in suburban counties.”

Both Thompson and Hevesi demanded that the MTA “re-evaluate” the need for the May 4 fare increases. But Kalikow said there would be no delay in the higher fares, which include 25 percent raises in commuter railroads along with higher tolls on bridges and tunnels, which took effect Thursday.

Hevesi said the MTA shifted around money on its books to hide $512 million in surplus revenue and thereby to support its claim that a fare increase was essential.

Hevesi conducted the audit after questioning the MTA but getting what he said were no answers from the agency, which at one point referred him to the MTA Web site. On Feb. 19, Hevesi served subpoenas on the MTA to force the agency to hand over its financial records to his office. The MTA complied.

The state comptroller’s explanation of his audit suggested that the MTA’s“five-year projections fail to respond to concerns and legitimate questions about whether the MTA will need another fare increase in 2005.”

Hevesi said in an interview with Gabe Pressman of WNBC-TV Sunday that he thought the MTA had “a predetermined plan from before the election year to make sure there was no fare increase during the election year.”

The MTA began talking about what it called financial trouble and a possible fare increase only after Gov. George Pataki, who appoints most of the agency’s board members, was re-elected in November.

Pataki said he had complete confidence in the MTA and its executive director, Katherine Lapp, who he said would “tolerate nothing less than integrity.”

Reach contributing writer Philip Newman by e-mail at Timesledger@aol.com or call 229-0300, Ext. 136.

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