The last contract proposal from Local 85, Amalgamated Transit Union, offered several ways that President-Business Agent Pat McMahon claimed would achieve the savings that Port Authority management has wanted.

"The only answer we got was no, no and no again," he said yesterday after the authority's board declared an impasse and imposed a contract scheduled to take effect Dec. 1.

Authority officials said the bottom line in the union's five-year proposal -- which included 4 percent yearly wage increases, cost-of-living allowances and higher pensions -- would cost "millions extra" at a time the agency must substantially reduce expenses.

As a result, authority Chief Executive Officer Steve Bland told everyone participating in the last bargaining session on Tuesday, "We're done."

"They suggested some minor savings," Mr. Bland said, "but for every savings, they suggested things that would improve benefits for members and significantly increase our costs. Their proposals are unacceptable, unaffordable."

Some proposals from Local 85 that management rejected and that helped precipitate an end to negotiations:

• Because the first 4 percent wage increase would not go into effect until Jan. 1, the union maintained the overall cost would be less than a 3 percent wage increase provided for in this year's budget.

• The union said changes it wanted in a grievance mediation process, "if implemented properly," would save hundreds of thousands of dollars in arbitration costs, provide for prompt settlements and "benefit employee morale."

• By providing low levels of bus service on what it called "minor holidays" like Martin Luther King Jr. Day and Good Friday, the union claimed more people would be off and paid only eight hours of holiday pay; fewer would be working at double-time-and-half; and "the amount of fuel that can be saved will be tremendous."

• The union maintained that by establishing a retiree health care trust fund, "while it may add initial expense, the authority can eventually jettison all of its legacy costs" for active and retired employees.

The authority said it would have to contribute tens of millions of dollars over many years to establish such a trust fund in addition to paying full costs of health care in the meantime.

"We can't afford to pay what we're paying now, so how could we afford more?" Mr. Bland said. "When they ask to cut service on those holidays, when a Sunday schedule cannot accommodate the ridership demand, they're just asking us to pay more people not to work."

The last union contract proposal that the authority negotiators rejected offered to bring employee contributions toward health care to the 3 percent level, the same as nonrepresented workers and management already pay, but not until July 1, 2011.

It also offered to eliminate a $500-a-month pension supplement, called a "kicker," that early retirees receive until they reach age 62. The union's offer was contingent upon the authority raising pensions from the current 2.25 percent, multiplied by years of service, to 2.5 percent times years of service, meaning a 30-year employee could end his career receiving a pension equal to 75 percent of his pay.