Reuters

Examples of its belt-tightening measures include delaying new hires by 60 days, freezing staffers' out-of-town travel unless it was linked to procurements, and abolishing food and beverage services, the MTA said in a statement.

These cuts will help the agency close next year's shortfall, which could reach $500 million. Rising construction costs are also clipping the MTA's capital budget.

But New York City Comptroller William Thompson said the mass transit agency, the biggest in the United States, should not delay capital improvements, especially smoke-removing fans, which could imperil firefighters, riders and MTA workers.

The MTA has proposed cutting $2.7 billion of capital spending, including $366 million of improvements in fan systems, which would be postponed until its next capital plan.

Other projects planned for the boroughs of Queens and Manhattan would also be delayed from the 2005-09 plan.

"Every one of the New York City Transit projects proposed for deferral -- signal upgrades, new buses and subway cars and station rehabilitations -- is important," Thompson said, referring to the MTA's subway division.

Steve Cassidy, president of the Uniformed Firefighters Association, said in a statement that upgrading emergency ventilation fans was imperative.

A spokesman for the MTA, which carries about 8 million passengers a day, had no immediate comment on Thompson's request that it postpone cutting capital improvements for a few months.

Over 40 percent of New York City subway cars on lines with lettered names still use the original 70-year-old signaling equipment and "antiquated" track switches, Thompson added.

The MTA's annual operating cuts will total 6 percent over the next four years, saving hundreds of millions of dollars.

The MTA, which runs New York City's subways, buses, commuter railroads and several tunnels and bridges, has already warned it might have to break its policy of avoiding back-to-back fare increases and raise them as soon as next year. These fares, as well as bridge and tunnel tolls, were increased earlier this year.

Ridership has spiraled as soaring gasoline prices make riding the rails more attractive. But this shift from cars to public transit also forces the MTA to buy more fuel, albeit at bulk discounts.

The MTA will release its preliminary financial plan for the next four years on July 23, but Chief Executive Elliot Sander informed the board of the new cuts ahead of time. (Reporting by Joan Gralla; Editing by Chizu Nomiyama)