By Joan Gralla
NEW YORK (Reuters) - Tolls on major New York City crossings and commuter train fares will rise starting in September under a plan approved on Friday by the Port Authority of New York and New Jersey, but increases will be smaller than first proposed by the agency.
New York Governor Andrew Cuomo and New Jersey Governor Chris Christie, who oversee the agency that also is rebuilding the World Trade Center complex, demanded on Thursday that the bi-state agency's board lower the fare and toll hikes it originally planned.
As a result, motorists with electronic E-Z Pass transponders will pay an extra $1.50, not the $4 hike the Port Authority had proposed in early August, which would have raised the fares to $12 from $8 in peak hours.
The toll will rise 75 cents a year each December from 2012 to 2015. Drivers who pay in cash would be hit with a $2 penalty -- plus the same increase.
The $1.75 base fare on the PATH train that links New Jersey and Manhattan will rise 25 cents a year for four years. The Port Authority had proposed hiking it by $1.
"We recognize the proposed increases come at a time when other economic pressures are being felt by our commuters," Port Authority Chairman David Samson said. Not raising fares and tolls would mean the loss of thousands of jobs, the halting of hundreds of construction projects, and the loss of billions of dollars in economic activity, he said.
Democrat Cuomo and Christie, a Republican, demanded that the agency, stung by scathing criticism of excess overtime, overly rich compensation and pension benefits and huge cost-overruns at some projects, including the World Trade Center, conduct a thorough audit.
The decision to lower the increases by Christie, a possible GOP presidential contender, and Cuomo, a first-term governor who analysts say likely will seek higher office, broke a long local tradition of sniping between the two states over which one receives more money for projects.
Lowering the fare and toll increases forced the agency to cut its capital plan by $5 billion to a 10-year total of $25.1 billion, from the $33 billion it had sought. That could set the stage for future squabbles between the two governors, which in the past have partly paralyzed the agency.
Port Authority officials did not immediately say which projects might be delayed, cut or scaled back.
With about $14 billion of debt outstanding, the Port Authority is one of the nation's most prominent issuers of bonds in the $3.7 trillion municipal bond market.
Samson said Port Authority spending will include $6 billion to finish the World Trade Center and $1 billion to raise the Bayonne Bridge's roadway so the next generation of bigger ships can sail under it. The 1931 bridge connects Bayonne, New Jersey, to New York's Staten Island.
Another $1.5 billion will be spent to rebuild the 1928 Goethals Bridge, which links Elizabeth, New Jersey, with Staten Island, and $700 million will be spent to replace suspension cables on the 80-year old George Washington Bridge, the world's busiest crossing,
Another $100 million will go to fix the 1937 Lincoln Tunnel helix, which funnels motorists into this crossing.
(Editing by Andrea Ricci and Dan Grebler)