As the MTA saga continues, Governor David Paterson said the MTA is being bailed out by the state, preventing fare hikes and tolls on the Harlem and East River bridges. With that said, Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith continue to think of a plan to bailout the MTA. “This is an emergency. I don’t even like the fact that New Yorkers are feeling anxiety over the fact that there could be 23 and 30 percent fare and toll hikes in the next couple of months,” Paterson said. “Therefore, I insist that the Legislature work this out in the budget today or immediately and will summon them back here if necessary.”

In a 12-1 vote last Wednesday, the MTA board decided to move forward with a plan to bail itself out of a $1.12 billion deficit at the expense of straphangers. The plan included massive bus service eliminations, reductions in subway service and a one-way fare increase to $2.50 that would take effect May 31.

In remarks given by MTA Chairman Dale Hemmerdinger last week, he said that voting on the budget was a “difficult” and “distasteful” decision. After sitting through nine public hearings, listening to 595 speakers, 44 hours of verbal testimony and reading 20,995 emails, the MTA board realizes the concerns of the public.

“Our customers may not be 100 percent happy with us, but this time many clearly understood there are other– external–players who have helped cause our dilemma,” he said. “Many even know exactly who helped cause this situation and who should be helping solve it.”

MTA Executive Director and CEO Elliot Sander said that service cuts and fare increases were the only major tools the state gave the MTA board to operate with.

He said, “Believe me, neither the board nor the senior staff of the MTA would be advancing these measures if we had any other choice. I hope that the State Legislature will soon reach agreement on a plan that not only helps us avert the fare and toll increases and service cuts, but also provides a long-term solution to the MTA’s operating and capital needs.”

Over the weekend, state legislatures inched closer to a new state budget that would include a rescue plan for the MTA. The same budget raises taxes for the wealthy that would generate $5.3 billion in revenue.

“This budget is far from ideal, but neither was the dire state of the economy that confronts us,” Smith said. “What we now have, however, is a road map for long-term economic growth and sustainable recovery to bring New York back into fiscal solvency.”

Reports indicate that last Thursday credit ratings agency Moody’s announced that the MTA’s bond rating could possibly be downgraded. If Albany doesn’t come up with a suitable bailout, the downgrade could make it more costly for the MTA to borrow money.