As expected, the full MTA board approved a new budget that includes service cuts on subways, buses, commuter railroads and paratransit— plus the controversial phase-out of student fares. The agency found it would be over $400 million short, after the State underestimated tax revenue, the State Legislature decided to eliminate some funding, and a judge ordered the MTA to pay transit union raises.

CityRoom reports that new MTA Chairman and CEO Jay Walder said, "In the two months that I’ve been here, it’s apparent to me that we don’t operate in a way that ensures that every taxpayer dollar that we receive is being used as effectively as possible," promising to review the agency's finances. “In short, we need to take the place apart. I wish there was a way to do it fast enough to take the things off the table that we’re talking about today; I don’t think we can."

Among the cuts offered up are closing the W and Z lines and reducing service the G and M; eliminating and cutting bus routes; making students pay for their student Metrocards (currently free); cutting paratransit service; and pay cuts for non-union MTA positions. The Post reports that many lawmakers and transit advocates criticized the MTA—Councilman Charles Barron said, "You respond to people's needs slower than the C train and G train on the weekends."

Newsday (subscription req'd) reports, "Walder said that the MTA's 5,000 administrative positions are 'too many,' that the $500 million spent on overtime must come down, and that the 50 percent increase in the cost of construction materials since 2003 is unacceptable." Walder added, "We must accept that as we do that, there will be layoffs. We must not be afraid to eliminate work that is unnecessary.... The reality is that the majority of our costs come from labor."