NYC taxi plan expected to make $1.46 billion ruled unconstitutional

http://usnews.nbcnews.com/_news/2012/08/18/13350856-nyc-taxi-plan-expected-to-make-146-billion-ruled-unconstitutional?lite&__utma=238145375.11486636.1345323032.1345323032.1345325512.2&__utmb=238145375.1.10.1345325512&__utmc=238145375&__utmx=-&__utmz=238145375.1345325512.2.2.utmcsr=google|utmccn=%28organic%29|utmcmd=organic|utmctr=%28not%20provided%29&__utmv=238145375.|8=Earned%20By=msnbc|us%20news=1^12=Landing%20Content=Mixed=1^13=Landing%20Hostname=www.msnbc.msn.com=1^30=Visit%20Type%20to%20Content=Earned%20to%20Mixed=1&__utmk=261302990

New York City's plan to expand taxi service outside Manhattan is unconstitutional, a judge ruled Friday in a decision that could leave the city with a $1.46 billion hole in its budget.

Manhattan state Supreme Court Justice Arthur Engoron ruled that the plan violates the state constitution's "home rule" provisions, which protect cities from undue interference by state legislators. The taxi plan was enacted by the state Legislature after a failed attempt to get it through the City Council.

City lawyers said they would immediately appeal the ruling, which could leave officials scrambling to remake this year's budget. Officials have said 2,000 yellow-cab medallion sales included in the plan would earn the city $635 million this fiscal year and $825 million more over the following two years.

The plan, put temporarily on hold in June after owners of the city's signature yellow cabs sued, would let the city sell 18,000 permits allowing livery cabs to pick up passengers who hail them on streets in upper Manhattan and the other boroughs. Currently, only yellow cabs can do that.