Better-than-expected finances will allow the MTA to shrink the size of its capital deficit by more than $2 billion, but some officials believe the found money would be better spent shrinking -- or eliminating -- future fare hikes.

The Metropolitan Transportation Authority Wednesday provided the latest detailed report on its finances, including an early look at the agency's 2016 operating budget, which is approximately $14 billion.

MTA chief financial officer Robert Foran said that since the agency last reported on its finances in February some new costs have arisen, including a $40 million judgment against the MTA in a legal battle with Nassau County over costs relating to its bus system, which the MTA ran until 2012.

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But some overperforming revenue streams, including real estate tax revenues and toll dollars, and lower than expected energy and employee pension costs, have resulted in a net gain of about $700 million.

The MTA is proposing using some of the money to back new bonds that could help reduce the deficit in its proposed $32 billion, five-year capital program to $12.4 billion from its current amount of about $14.8 billion. Simultaneously, the MTA wants to raise its target for internal savings by a half-billion to $1.8 billion by 2019.

"We cannot ask of others that which we do not ask of ourselves," MTA chairman Thomas Prendergast said, referencing the role of the state and federal government in funding much of the capital budget.

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The MTA is forecasting surpluses in each year through 2017, but Foran noted that those projections assume a continuation of the MTA's policy of raising fares every other year by 4 percent. The next increase is set for 2017.

MTA Board member Mitchell Pally of Stony Brook questioned the strategy of using the excess funds to further pay down its capital expenses while treating future fare hikes as "an inevitability."

"I think we've already done our fair share. I'm not sure we should do more than our fair share," said Pally, who urged the MTA to revisit its policy for automatic, biannual fare hikes to "give our riders a break."

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"I think we owe them today for their sacrifices," Pally added.

Prendergast said that as long as the MTA is able to meet its financial obligations it would consider lowering the amount of future fare increases -- as it has in recent years.

The MTA is also proposing setting aside $183 million for additional service, including for "improved station appearance and homeless outreach" on the Long Island Rail Road.

Thirty-seven year LIRR commuter Peter Ruffner said it was "fantastic" to hear that the railroad planned to address the homeless problem at some stations. Over the last several years, Ruffner has repeatedly reached out to the LIRR about problems with homeless people at his home station, Seaford, where he says panhandlers routinely board trains to ask for money.

"This problem is getting to the point where it has to be addressed," Ruffner, 60, said. "It has to be addressed in a sympathetic manner, but it has to be addressed. It can't just be scoffed at."