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Yesterday, New York's Metropolitan Transportation Authority (MTA) released its final proposed 2009 budget and 2009-2012 financial plan — and neither one contains good news for employees or riders.

The authority is projecting budget deficits of $1.4 billion in 2009, $2.4 billion in 2010, $2.6 billion in 2011 and $2.9 billion in 2012 due to plummeting tax revenue, rising fuel costs and higher debt service obligations. To make up the shortfalls, MTA plans to implement a series of cost-cutting measures, as well as raise fares and reduce service.

The authority began cutting costs in July, such as by consolidating back office functions, committing to reduce controllable expenses by 6 percent over four years and integrating its three bus companies. MTA and its member agencies also have reduced administrative hiring, and cut travel and food expenses.

The authority has asked its agencies to further help reduce the budget gap by reducing expenses another 4.7 percent. MTA New York City Transit plans to cut jobs by 7.5 percent, modify some subway routes and increase headways during non-peak periods; MTA Metro-North Railroad proposes to implement administrative cuts, reduce car and station cleaning, and cut some service; and MTA Long Island Rail Road plans to cut administrative jobs, reduce ticket offices, cut train crew staffing, extend some maintenance cycles, and eliminate some special-event trains and select weekend and off-peak trains.

In addition, MTA proposes to take out an inter-agency loan of $135 million to reduce the budget gap in both 2009 and 2010, and repay the loan in 2011 and 2012. The authority also plans to transfer funds from the 2006 budget surplus that have not yet been committed to other projects to the operating budget, and ask the state to eliminate tax loopholes affecting real estate transactions.

MTA officials also are awaiting a December report from the Ravitch Commission, a 13-member committee appointed by Gov. David Paterson in June that's charged with recommending strategies to fund capital projects and operating needs during the next decade.

MTA hasn't yet determined a revised fare structure, but officials will develop one in the coming months, then hold public hearings to review the proposed increase, the authority said.

MTA is required to pass a balanced budget by the end of the calendar year. The final spending plan will be considered by the board on Dec. 17.