A drop in state tax revenue could lead to even further cuts for the Metropolitan Transportation Authority, which is already set to impose steep fare hikes and service cuts unless Albany comes through with a bailout.

The state Tuesday informed the MTA that tax collections normally dedicated to the agency will be as much as $200 million off target.

"I think the only thing that would even be comparable to this goes back to the real crises that the MTA faced in the late 1970s and early 1980s," said MTA spokesman Jeremy Soffin.

That's on top of of a big dropoff in tax revenue from real estate transactions.

"There are no real real estate transactions taking place, or virtually none," said Mayor Michael Bloomberg. "The MTA has less money than what they planned, so does the city, so does the state. We keep adjusting the budget. We've saved a lot and and we cut $3 billion and pre-paid a lot of interest. We've done a lot of things. But no one really anticipated the wheels coming off to the extent that they have."

The agency says it plans to re-forecast its budget on April 27th.

"As always, the MTA only has two options at its disposal: cut expenses, which is largely service, or raise fares," Soffin said.

While the MTA is already planning 1,100 layoffs, it cannot look to the unions for further relief. Contract talks with the Transport Workers Union, which represents most MTA workers, is now stuck in arbitration.

The alternative, of course, is a state rescue plan similar to the one crafted by former MTA Chairman Richard Ravitch that all but died in Albany. The plan called for a payroll tax and bridge tolls that would have scaled back fare hikes and service cuts – and created a cash reserve for times like this.

"We built a cushion in, anticipating that revenues would decline further. And put a cushion in of $400 million," Ravitch said. "It now looks as if that may not be adequate for the calendar year 2009."

At this rate, the budget gap could balloon to nearly $800 million by the end of the year, putting even more pressure on Albany to come up with some kind of a rescue plan.

Meanwhile, transit advocates handed out leaflets Tuesday to riders, advising them to call their state senators and tell them to stand up for transit in Albany.

"If they're angry about fare hikes and service cuts, the best thing to do is to call state lawmakers and say, 'this is going to be murder on me, what are you going to do about it?" said Gene Russianoff of the Straphangers Campaign.

Riders told NY1 that they will reach out to their lawmakers, but there were mixed opinions about whether those calls would have any impact.

"I think if more people proposed outrage, more people let government know what's going on, how they feel, then absolutely, I think they'll make a change," said one rider.

"I do believe it will have an impact. We need to be heard," said another.

"Would it work? No, they're politicians," countered a third. "They're all the same."

"It's been done in the past. They have town hall meetings. People show up. But at the end of the day, I don't think it is the people's call when it comes to rate hikes," agreed another.

The MTA is already planning to increase subway and bus fares and commuter rail tickets next month by 20 to 30 percent.

In June, the cash-strapped agency also plans to cut dozens of bus routes, as well as the W and Z subway lines.

The latest round of bad news makes it likely the MTA will have to take further gap-closing actions before the end of the year.