PELHAM BAY - The Metropolitan Transportation Authority is directing its agency heads to develop alternative budgets in case the economy takes a turn for the worse.

Transit officials say budget reductions are necessary in order to deal with a nearly $900 million deficit. Each division has been instructed to slash 4.5 percent of expenses.

MTA Chief Financial Officer Gary J. Dellaverson says the cuts should target management-level expenses before affecting service. Some commuters are still fearful of potential service cuts as more turn to mass transit due to the gas crunch.

Additionally, Gov. David Paterson has appointed a commission to examine the MTA?s financial problems. Recommendations from that probe are expected by December.