Following a day of closed-door meetings in Albany with Senate Majority Leader Malcolm Smith, the two Democrats in opposition to a proposed Metropolitan Transportation Authority bailout deal joined the rest of their colleagues in support of it.

The two holdouts, both from Long Island, initially rejected part of the plan in which school districts and hospitals would not be exempt from the proposed payroll tax.

The two senators dropped their opposition after Smith agreed to exempt school districts from the tax.

Smith says there is some language that still needs to be worked on, including a verbal compromise proposed by Governor David Paterson to reimburse school districts.

"We want to wait until the bill language is finalized tomorrow. There is some discussion going on tonight with the bill drafters," Smith said. "Once, in fact, we have that language completed and we take a look at it as a full conference with the other members and we think we do have a framework for coming to an agreement on a bill this week to bail out the MTA."

Straphangers Campaign Spokesperson Gene Russianoff says Albany needs to beef up capital investments to take the burden off of commuters.

"I tell people, the fare is what you pay, service is what you get, and the capital program dictates the quality of your ride, whether you'll be on a 42-year-old creaky subway car that breaks down a lot or the mercy of 80-year-old signals," said Russianoff.

The tentative deal also calls for a forensic audit of the MTA to see if there is any money to offset payroll taxes for some non-profits and hospitals.

In addition to the payroll tax, the plan includes a driver's license fee hike of 25 to 30 percent, a $25 supplemental motor vehicle fee, an additional 5 percent sales tax on car rentals, and a 50 cent yellow taxi surcharge. The controversial taxi fee had been proposed at a dollar a ride.

The proposal now goes to the Democratic-led State Assembly, where it will more than likely pass. If approved, straphangers could face fewer or no service cuts.

The MTA has no comment on the tentative deal at this time.

Meanwhile, Mayor Michael Bloomberg says lawmakers need to focus on finding a long-term plan for the MTA.

In a statement, Bloomberg says, "There is no painless option, but 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."

The mayor says he's especially concerned about the city's infrastructure and doesn't want to go back to the 1970s when buses, trains, and tracks started to break down.