Innovative Approach Funds MTA, Fuels Economic Growth and
Saves Jobs, While Providing Free Buses and
Slashing Subway Fares

Wednesday, December 10, 2008 -- Today, Theodore W. “Ted” Kheel unveiled a progressive alternative to the Ravitch Plan that generates over $1 billion in annual revenue for the MTA while helping to recapture billions of dollars for the local economy, retain tens of thousands of local jobs, and bring free transit to all New Yorkers.

In a letter sent this morning to Governor David Paterson, Assembly Speaker Sheldon Silver and State Senator Malcolm Smith, Kheel laid out the details of the comprehensive plan, which was refined with the assistance of leaders in government, business, labor and advocacy. Kheel offered his team of mathematicians and transit economists to the state's leaders as they formulate a stronger plan to address the transit crisis.

“The Ravitch Immobility Tax is a 1970's-era plan that disconnects transit and traffic, making no real impact on the congestion problem that chokes our regional economy,” said Kheel. “The Ravitch Plan ignores the staggering social cost to the city of automobile traffic, leaving drivers to pay little for mass transit, and imposing the burden instead on vulnerable segments of our society that can ill afford it in these times. Instead of taxing jobs during the largest period of unemployment in recent history, we need an innovative plan that fuels economic growth, fixes traffic, and provides long-term benefit for working New Yorkers.”

Kheel’s innovative plan funds free buses around the clock and free subways at off-peak hours. Subway fares would remain during rush hour, but would be reduced by 75% on average. The plan will raise $1 billion in revenue without the introduction of any new taxes and save billions of dollars in congestion costs that strangle the city’s economy and hurt our job market. Kheel’s time-variable “Traffic Improvement Fee” tolls drivers an average of $16 dollars for entering Manhattan’s Central Business District.

A striking new feature of the Kheel Plan is its time-of-day price variation on fares and tolls. Both charge high prices at rush hour and discounted prices during nonpeak hours, providing transit and car riders a choice about what they pay. This scheme raises more revenue than a flat fee and reduces crowding on subways and congestion on roads.

"Business as usual will not save transit riders from painful fare hikes and service cuts this time around," says Paul Steely White, Executive Director of Transportation Alternatives. "Ted Kheel's variable toll plan looks beyond the fare box to get the MTA out of this crisis."

Kheel Plan

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