New York City's transit union declared a strike Tuesday morning after failing to reach a deal with the Metropolitan Transportation Authority following days of bitter labor talks. The decision was expected to cause chaos during the morning rush hour. "This contract between the MTA and the Transport Workers Union should have been a no-brainer," union president Roger Toussaint said at a news conference announcing the strike. "Sadly that has not been the case." MTA Chairman Peter Kalikow called the strike "a slap in the face" to all New Yorkers and said state lawyers will immediately head to court in seeking to block the walkout. More than 7 million daily riders will be forced to find new ways to get around because of the strike, which comes at the height of the holiday shopping and tourist season. The Transport Workers Union and the MTA had worked furiously to try and reach a new contract, hoping to avoid the city's first transit strike in more than 25 years. It is illegal for mass transit workers to strike in New York, which means the 33,000 bus and subway employees will incur huge fines. Bus drivers have been instructed to drop off all passengers and return to their depots, and subways will finish their trips before turnstiles are chained and locked up. Exits will remain open to allow any last passengers off before the stations are shuttered. Mayor Michael Bloomberg was poised to put into effect a sweeping emergency plan to reduce gridlock and keep certain streets open for emergency vehicles. New Yorkers were urged to make arrangements to car pool, bicycle and walk to work, or change their schedules and work from home. Bloomberg has said the walkout could cost the city as much as US$400 million a day, and would be particularly harsh at the height of the holiday season. He said a strike would freeze traffic into "gridlock that will tie the record for all gridlocks." Talks broke down about an hour before the midnight deadline and the union board went into a meeting to vote on whether to strike. Toussaint made his announcement just after 3 a.m. Earlier, MTA spokesman Tom Kelly said the agency "put a fair offer on the negotiating table. Unfortunately, that offer has been rejected." The latest MTA offer included annual raises of 3 percent, 4% and 3.5%, considerably lower than what the union demanded. The previous proposal included 3% raises each year. The down-to-the-wire negotiations came as workers at two private bus lines in Queens walked off the job, a move designed to step up pressure on the MTA ahead of the deadline. The contract expired Friday at midnight, but the two sides agreed to keep talking through the weekend and the union set a new deadline for Tuesday. The city had been bracing for a citywide transit shutdown for rush hour Friday. Like last week, Bloomberg headed to the Office of Emergency Management headquarters and planned to walk across the Brooklyn Bridge to City Hall if there were a strike. Pension issues have been a major sticking point in the talks. The MTA wants to raise the age at which new employees become eligible for full pension from 55 to 62, which the union says is unfair. Commuter frustration was evident Monday, with people fed up with all the uncertainty. "Enough is enough," said Craig DeRosa, who relies on the subway to get to work. "Their benefits are as rich as you see anywhere in this country and they are still complaining. I don't get it." Frustration also mounted in Queens, where employees of the striking Jamaica Buses Inc. and Triboro Coach Corp. bus lines were out early - many chanting "No contract, no work!" The companies serve about 50,000 commuters, and are in the process of being taken over by the MTA. Thus, the union temporarily found a loophole to avoid the state law that prohibits strikes by public employees. "No one wants to be out here," said 36-year-old Triboro bus driver Frank Lomanto, standing outside the company depot. "But this is something we have to do." At a Jackson Heights transit hub shortly after midnight, Brunilda Ayala said she had no sympathy for the union. "How can you give a raise to a bus driver who would make three old ladies walk home in the cold?" asked Ayala, 57. Jose Padilla, 34, said he and fellow Coca-Cola employees are meeting at 4 a.m. to come up with a plan to put more workers in trucks to ensure their product gets delivered in the case of a strike. "We have to get the Coke to the people," Padilla said. "Just because there is a strike, people don't stop drinking coke." A citywide bus and subway strike would be New York's first since an 11-day walkout in 1980.