Outerborough cab plan failure may cost $1B

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A Manhattan Supreme Court judge struck down the outerborough taxi hail plan as unconstitutional Friday, saying in his decision that the “home rule” clause was violated when Mayor Michael Bloomberg tried to pass the plan through the state Legislature instead of the City Council.

The judge’s ruling could mean that the city will not get the $1.4 billion from medallion sales it was relying on to balance the fiscal year 2013 and future budgets, which could lead to layoffs, Bloomberg said at an event in Williamsburg.

“You spend less, you have fewer people,” Bloomberg said. “There’s two ways to have fewer people. One is through attrition and one is through layoffs — and attrition doesn’t work very well in a slow economy.”

The Metropolitan Taxicab Board of Trade and other trade associations had levied a lawsuit against city and state agencies in April after Gov. Andrew Cuomo signed a law, championed by Bloomberg and reached after months of negotiations in the state Legislature, that created 18,000 permits for a new class of cabs that would be able to pick up street hails only in the outerboroughs and Upper Manhattan.

The law also opened the way for the sale of 2,000 medallions for wheelchair-accessible yellow taxi cabs.

Judge Arthur Engoron’s ruling said Bloomberg had erred in bypassing the Council to get the bill on the books, contending that the city has regulated its own taxicab industry for decades.

“Until now, the City Council had been ‘the decider,’” Engoron wrote. “To allow the mayor, suddenly, after all these years, to decide whether to issue new medallions, and if so how many, is the embodiment of reallocating power, and runs roughshod over what had heretofore been the Council’s prerogative.”

Michael Cardozo, a lawyer for the city Law Department, called the decision “disappoint­ing” in a statement and said the city would be filing an appeal.

“The irrational fear of lost profits by medallion owners and lenders should not be permitted to derail these important programs,” Cardozo said.

In a statement praising the decision, the Board of Trade called upon the Bloomberg administration and Taxi & Limousine Commissioner David Yassky to fix the budget issue.

“The city can provide improved service, protect the thousands of hardworking drivers and owners in the taxi and livery industries and get revenue from new medallions,” the board said, “but first it must accept today’s decision.”

Yassky described the judge’s decision in a statement as a loss to residents outside Manhattan, disabled riders and livery drivers eager to offer the street hail service outside Manhattan.

“We owe it to all New Yorkers to appeal this judge’s opinion,” Yassky said.

Bloomberg had held a conference showing what was hoped to be the first of the apple green outerborough taxis in May.

City Comptroller John Liu had also threatened to reject Nissan’s “Taxi of Tomorrow” and to make all of the new taxis wheelchair-accessible, as they are in London. The Law Department argued he had no standing to do so.

Reach reporter Rebecca Henely by e-mail at or by phone at 718-260-4564.

Posted 10:32 pm, August 22, 2012
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