A long-term plan for capital financing for the Metropolitan Transportation Authority appeared to be off the table yesterday as New York lawmakers kept talking about a rescue plan for the troubled agency.

Over the weekend, Gov. David Paterson proposed postponing action on a capital spending solution while finding a bailout agreement for the operating budget that would mitigate large fare increases and service cuts.

"The governor's office is working with the Senate and Assembly to reach a final agreement," said Paterson spokeswoman Erin Duggan.

An agreement had not been reached by press time yesterday evening.

New York City Mayor Michael Bloomberg criticized the exclusion of the capital spending in current negotiations and called for "stable, reliable funding for capital projects."

"As discussions for a permanent funding plan for the MTA continue, stopgap measures that kick the big problems down the road must be rejected," Bloomberg said in a statement. "The issues will be no simpler a few months from now than they are today, which is why Albany must find a permanent stream of funding for capital projects - not next fall, but right now."

Last month Senate Majority Leader Malcolm Smith, D-Queens, proposed a series of taxes and fees intended to raise $1.76 billion annually and would have financed capital spending for roads in upstate New York and Long Island as well as MTA capital spending.

Smith's proposal included a payroll tax effective in the 12 counties the MTA serves and would raise about $1.5 billion annually. Paterson's latest proposal would reimburse local school districts $60 million annually for the tax.

The failure of legislators to act on a plan last month, triggering the MTA board to approve severe fare and toll increases and service cuts to close a $1.2 billion deficit, prompted Moody's Investors Service to put the authority's transportation revenue bonds on watch for a downgrade from A2. Last week the MTA announced its current-year deficit had grown by an additional $621 million.

Fares and toll increases will begin phasing in on May 31, adding impetus to lawmakers to reach an agreement.

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