News that Albany was considering further cuts to the state's mass transit system outraged city lawmakers Sunday and left many wondering who would bear the brunt of it.

"It's clearly a concern, given the fact that you've just seen an increase," said City Comptroller Bill Thompson. "Before anybody slashes funding to the MTA, they should go back and look at fairness and equity to the transit authority here in the city."

Gov. David Paterson proposed on Friday a plan to cut state funding to the Metropolitan Transportation Authority by $60 million as part of a 2 percent across the board reduction for all state agencies.

"Given the difficult economic circumstances and the need to close a budget gap of $4.6 billion, the governor believes all agencies must economize," said Jeffery Gordon, a spokesman for the state's Division of Budget.

Last month the MTA increased fares to offset the agency's future deficits but along with the hikes also promised to make systemwide improvements. Last week, though, agency officials announced that the service upgrades were put on hold as they came to grips with real estate revenues that were $21 million below budget.

Councilman John Liu (D-Flushing,) who heads the council's Transportation Committee, said it wasn't clear yet what impact the proposed cuts would have on the system.

"It's too early to tell and too painful to think about a fare hike," he said. "The problem is that whenever there is a slight dip in revenue there is a rush to reduce service, but when there is a revenue windfall there is no corresponding rush to beef up service."

Congestion pricing supporters said that the proposed cuts showed the importance of guaranteeing the revenue stream that the proposal promises. "Cutting transit funds is like cutting the golden goose," said Paul Steely White, executive director of Transportation Alternatives. "Public transit is a public good and the state needs to support transit if it is going to be viable."

The governor's plan must survive budget negotiations with the state Senate and the Assembly.

"Budget negotiations are continuing and we remain hopeful that we will receive the funding levels assumed in our financial plan," said MTA spokesman Jeremy Soffin.

State Sen. Bill Perkins (D- Manhattan), a member of the Transportation Committee, reached in Albany yesterday said that budget negotiations were ongoing and he expected a clearer picture by the early hours of this morning.

"It's not settled," he said. "There is a negotiation going on. Things will get better."