If you eliminate the bus fares, you are slashing the transit budget by a billion dollars.

Not if you replace that with funds from elsewhere. My first choice would be property taxes in NYC. Both the residents and businesses in the city would benefit from zero-fare buses. Less expense for commuting workers. Access to more workers for business. Raising a billion dollars that way is probably a small fraction of a percent added to property taxes.

Make it a slightly larger small fraction, call it a transit tax, and use it for other needed transit projects - subway, light rail, commuter parking, etc.

OK - I looked up the numbers. Based on assessed value, the rate would need to be about 0.32% to raise a billion dollars. The total assessed value in the City is roughly 1/5 of the total market value. Based on market values, the rate would need to be 0.067%.

--Peter

PS - The figures I looked up.

$ 311 billion - total assessed value in NYC
$1500 billion - total market value in NYC