New York’s Metropolitan Transportation Authority on Wednesday voted to hold hearings on fare and toll increases to help balance its 2011 ­budget.

The MTA released a $12.04 billion preliminary budget and four-year financial plan that relies on a 7.5% increase in fare and toll revenue to raise a projected $413 million to help close a $1.03 billion deficit next year.

The authority expects to sell $1.64 billion of new-money bonds in 2011, $2.05 billion in 2012, $2.52 billion in 2013 and $1.91 billion in 2014, according the financial plan.

Part of that issuance will be in the form of commercial paper.

MTA officials are assuming that fixed interest rates will rise on the agency’s debt issuance.

Rates on its transportation revenue credit are projected to rise from 5.4% in 2010 to 5.76% in 2011 and continue on that trajectory to 7.35% in 2014.

The MTA projects variable rates will remain flat at 4%.

Several board members said the authority needs to reexamine its $26.27 billion five-year capital plan, which has a $9.9 billion funding gap.

“Debt and the capital program are the seven-ton elephants in the room that we don’t talk about,” said board member Doreen Frasca. “We throw a blanket over it and we think we’ve covered it, but maybe it’s best we put a string bikini on the elephant.”

Finance committee chairman Andrew Saul called the MTA’s debt situation a “time bomb.”

“We have to go back and look at the capital plan because this is putting a huge burden on this thing long term,” he said. “We don’t want to run into a situation where we can’t finance these projects any longer.”

While the fare and toll increases — which were agreed upon in principle last year by state lawmakers — are sure to be opposed by riders, some other parts of the plan have already stirred opposition.

A proposal to cut funding for Nassau County’s bus system garnered criticism from board member Patrick Foye, who represents the Long Island county.

Over the past 10 years, Nassau has reduced the amount of money it paid the MTA to operate its bus system.

“We believe it’s unfair and unrealistic to expect Nassau County to address this deficit in one year, especially given the fact that Nassau County is broke,” Foye said. “These funding reductions, given Nassau County’s fiscal realities, will result in the end of Long Island bus service in Nassau County.”

Foye said County Executive Ed ­Mangano has proposed an alternative but would not discuss it in public.

Foye got little sympathy from other board members.

“The board can’t allow the MTA to be stiffed on services provided, especially for 10 years,” said board member Susan Metzger. “It’s about time we start doing something about this.”

The financial plan also calls on labor unions to make more concessions. It assumes that labor unions will agree to two years without a net increase in wages or benefits.

Any such increase would have to be offset somewhere, such as productivity gains.

That didn’t sit well with the Transport Workers Union local chapter 100, which represents about 35,000 MTA workers — more than half its workforce.

“We obviously are opposed,” TWU 100 president John Samuelsen said in a statement. “Any union worth its salt would never agree to pay for its own wage increases, especially when those increases do nothing more than keep the workers even with inflation.”

Samuelsen said the union believes that in 2012, when their contract is up for renewal, the economic picture and thus the MTA’s revenues will have ­improved.

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