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NEW YORK (CBS) ― It's a one-two punch that the Metropolitan Transportation Authority says it has to make: a hike in fares and cuts to service and jobs. As expected, the budget cash crunch didn't spare anyone who uses mass transit, from buses, subways and suburban commuter rails.

Hard, harsh, rough, severe, painful. It doesn't matter which adjective you use, it all boils down to the fact that everyone who uses mass transit in the region is going to feel the effects of the MTA's cash crunch.

Doomsday arrived Thursday for subway riders crowding onto the Lexington Avenue line – they already looked like sardines in a can, but things are about to get a whole lot worse.

"Subway service reductions include route alterations that will result in extra transfer, longer travel times, longer wait times, and longer walking times," said MTA CEO Elliot Sander.

That same litany of pain will effect everyone using any transportation service provided by the MTA. Buses, subways, the LIRR, Metro North, even people who pay tolls at the agency's nine bridges and tunnels can expect longer lines.

"It is extremely distasteful," Sander admitted. "No one should in this room should leave here today thinking this mix of service cuts and increases in fares and tolls are actions I am eager and the staff is eager to implement. Nothing could be further from the truth."

The MTA's deficit is $1.2 billion and growing and no one is spared.

There are 2,700 layoffs. Bus and subway routes are being eliminated, shortened, and reduced, and they're going to try and cram another 10 to 18 standees in each car and bus.

The LIRR is canceling and combining trains. Metro North trains will have fewer cars, squeezing more people in each one and decreasing service.

There will be fewer cash lines at the bridges and tunnels.

Routes weren't the only types of subway services being cut. Officials also plan to cut back on cleaning staff for subway stations and cars, meaning riders should expect dirtier cars and, dare we say, the return of graffiti?

"To have a balanced budget we can either cut service or hike fares. If we don't have a balanced budget by the end of the year, we can all go to jail," said MTA Chair Dale Hemmerdinger.

Perhaps the worst part: everyone will face two fare hikes. There are plans for a 23 percent fare hike in June 2009, and a 5 percent hike 18 months later in January 2011.

Specifically, the fare for express buses would go from $5 to $7.50, and the cost of Access-a-Ride vans for the disabled would double.

The MTA expects the hike to generate $670 million in new revenue in 2009.

"I'm not happy about it. I mean people are going out of work right now. People don't have jobs, they're not getting raises, getting layoffs. Where do they think the money is coming from?" sais Linda Coady, a Flushing resident.

Even before the MTA announced its plans there were protests. Giant postcards with thousands of signatures asking for a state bailout were flashed outside the meeting.

"Either we get help from Gov. David Paterson and the state legislators or we're going to get it in the neck," said Gene Russianoff, President of the Straphangers campaign.

So will all these cuts and fare hikes really go into effect? The truth is n one knows. It all depends on the state, which already has its own budget woes.

Meanwhile, Gov. David Paterson said the MTA shouldn't expect any help from Albany. Failure to come to an agreement on the budget cuts this week will make it difficult to guarantee state aid.

"No one is suggesting that our citizens not sacrifice or pay a little more, but what these proposals are saying to middle income New Yorkers, working, poor, disabled people is that basically we're bailing out the MTA on your backs only," says Manhattan Borough President Scott Stringer, who suggested the return of a commuter tax.

The new budget still has to be voted on next month and wouldn't kick in until June, after a series of public hearings.

BUDGET SPECIFICS

Before any gap-closing measures are implemented or prior-year carryover is included, the MTA's budget deficits are projected to reach $1.441 billion in 2009, $2.394 billion in 2010, $2.647 billion in 2011, and $2.972 billion in 2012. The budget gaps are to be filled through actions from the MTA itself, its employees, governmental partners and customers:

• MTA Internal Actions Proposed in July: The gap closing actions anticipated in July are continued. These include 6% non-service related cost reductions over four years, continuing the 1.5% annual reduction begun last year. In addition to belt tightening, a series of administrative reductions in hiring, travel and food, and telecommunications are being implemented in 2008 and 2009 at all of the agencies.

• Labor: The plan assumes that MTA employees will make a modest contribution to the plan through negotiation of new contracts. In addition, the plan expects efficiency measures, notably the Business Service Center, which will consolidate back office operations for all MTA agencies. This will require downsizing the workforce and this plan, as previous plans, provides funds to cover the expected cost of downsizing, but anticipates annual savings to begin in 2012. Savings are also assumed from other reorganization initiatives.
  
• Cash actions: MTA will take an inter-agency loan of $135 million to reduce the gap in both 2009 and 2010, which it will pay back in 2011 and 2012. The plan also identifies funds that had been allocated from the 2006 surplus but not yet committed that will be transferred back to the operating budget in 2008 to be used for future gap-closing. Projects that would have used these funds will instead be included in the next capital program.

• Government partners: The plan proposes legislative changes to federal mandates for commuter railroad employees that, beginning in late 2009, are projected to save $15 million, then roughly $62 million annually without affecting employee benefits. The plan also continues to propose asking the State to eliminate tax loopholes affecting real estate transactions, which is expected to generate $50 million annually beginning in 2009. However, the plan no longer anticipates the $600 million in new State and City contributions beginning in 2010 or reimbursement for school fares and senior discounts, which had been expected to generate $104 million annually beginning in 2009. Nor does it assume that the City and the MTA share paratransit costs, which would have provided $113 million in 2009 and more thereafter or the restoration of the fall off in State tax aid.

• Additional actions for budget balance: To make up the remaining deficit, each agency identified actions to reduce their budgets by an additional 4.7%. Each agency identified additional administrative cuts that could be taken over and above the normal, recurring 1.5% reduction program proposed in July (as discussed above). For the additional reductions, each agency was required to meet an independent target of no less than 5% of its managerial expenses. The proposed service reductions were guided by two principles: first, reductions should not compromise safety, security or reliability; and second, to target cuts to services where an alternative exists for customers to reach their destination. The proposed reductions, which are described in more detail in the budget documents, are summarized below.*

• MTA customers: Finally, the plan proposes a fare and toll increase designed to yield a 23% increase in fare/toll revenue in June 2009. The revised fare structure has not been determined, but will be developed and discussed in the coming months. The plan also assumes alternate year fare and toll increases starting in 2011 to keep pace with the growth in consumer prices.

o In addition, customers who use paratransit services and express buses, two services with extremely low fare recovery ratios, will see additional increases. Paratransit fares will increase to twice the regular Transit base fare, as allowable by law and consistent with other bus agencies, and express bus fares will increase from $5.00 to $7.50.

o The plan also increases Long Island Bus fares by 20% over and above the general proposed fare increase in the absence of additional support from Nassau County.

As a result of these and other gap closing actions, the MTA expects to carry a modest cash balance of $65 million into 2010, with deficits still projected for 2010 ($266 million), 2011 ($454 million) and 2012 ($608 million). Without these measures, budget gaps are expected to grow to nearly $3 billion in 2012.

Specific agency budget reductions include:

NYC Transit: Savings of $167 Million in 08/09, $280 million annually 2010-12

• 7.5% reduction in managerial, professional and clerical positions

o On top of 1.5% cuts taken prior to service reductions.

• Subway reductions:

o Route modifications - shorten G, operate N via Manhattan Bridge late nights, eliminate W and extend Q to Astoria, operate M to Broad rush hours, eliminate Z, add J local service.
o Increased headways and loading guidelines during non-rush hours - headways increase from 8 to 10 minutes on ADEFGJMNQR on Saturdays and the ADEFGNQR on Sundays; headways increase from 20 to 30 minutes from 2 a.m. to 5 a.m.
o Reduced station booth and station customer assistant staffing; elimination of enhanced station area track cleaning program.

• Bus reductions:

o Reduce or eliminate low ridership services, especially during weekends or late night, and services that largely duplicate subway service.

Metro-North Railroad: $35 million annual reduction

• Administrative cuts in management, clerical and other areas
• Increase loading guidelines and reduced service to both East and West of Hudson
• Maintenance reductions
• Reduce car and station cleaning

Long Island Rail Road: $36 million savings in 09 and $53 million annually 2010-12

• Reduce administrative positions
• Reduce ticket offices, sellers and windows
• Reduce train crew staffing
• Service reductions on special service trains and select weekend and off-peak trains
• Extend select maintenance cycles

Long Island Bus: $5 million of savings in 2009 and $6 million annually thereafter

• Reduce managerial headcount up to 10%
• Reduce/eliminate service on low ridership routes
• Savings associated with CNG and service contracts
• Increase employee health and welfare contributions

Bridges and Tunnels: $17 million savings in 2009, $59 million over the plan period

• Administrative savings
• Close some manual/cash lanes during low-traffic periods
• Reduce facility security and truck weight enforcement personnel
• Reschedule some bridge painting projects to align with structural work in the next capital program
• Eliminate the Cross Bay Bridge Rebate Program, reduce frequency of E-Z Pass paper statements, and tighten E-Z Pass controls

MTA Headquarters: $9 million annual savings

• Reductions in managerial headcount, service contracts and purchases of goods and services.

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