Lawmakers in Albany rejected a proposal yesterday to charge Manhattan motorists an extra fee to drive in the city, a plan advocates hoped would reduce traffic and curb pollution.

Assembly Speaker Sheldon Silver announced the decision after a survey of Democratic Assembly members in a private conference. The decision means the city will forfeit $354 million in federal funding for trying to kick-start the plan.

Much of the opposition came from outlying areas of both Brooklyn and Queens, areas not readily accessible to the city’s mass transit system.

Meanwhile, many residents of Brooklyn neighborhoods closer to Manhattan feared that their streets would become “park and rides” as people driving in would park there, then take the subways to avoid paying the proposed $8 fee to drive into Downtown and Midtown Manhattan during business hours.

Councilman Vincent Gentile, a Democrat who represents Bay Ridge, said, “I am pleased that the State Assembly has opted to pass on this hastily conceived, half-baked plan. New York’s congestion issues are real, but taxing motorists further was never the way to go. MTA has a serious credibility gap, and any projects that promise ‘future’ improvements fail to pass the smell test by their very nature.” State Sen. Carl Kruger, who represents southern Brooklyn, was probably the lead voice in the state Senate opposed to the mayor’s plan.

He said, “To say the plan is `dead’ is a misnomer, because it shouldn’t have been born in the first place.” In this day of recession and job cutbacks, he said, introducing what amounts to another tax on middle class New Yorkers (the $8 fee) would be intolerable. Furthermore, he said, “three-quarters of the MTA’s budget goes to the LIRR and MetroNorth [rather than to the city’s bus and subway system].

“If the city wants to raise money for mass transit outside the box, they could support the `millionaires’ tax,’ which would be a tax on people making more than million dollars a year in salary. The Assembly’s majority supported it, but the mayor opposes it,” he said.

Not everyone, of course, shared this opinion on the death of congestion pricing. Wiley Norvell, a spokesman for Transportation Alternatives, an advocacy group for non-auto transportation, said that the MTA will now have a harder time getting funding for its projects because it will have to seek additional sources of funding.

Commenting on Mayor Bloomberg’s statement that legislators who will complain in the future about transit improvements not getting done will have no one to blame but themselves, Norvell said, “That’s pretty close to the mark.” Norvell added that between a third and a half of the organization’s membership comes from Brooklyn.

Kate Contino, a spokesperson for another advocacy group, the Straphangers Campaign, said that without congestion pricing, waits between trains and buses will become greater, traffic jams will get worse, and the trains and buses themselves will become more crowded.

A Sunset Park resident, she said that Gowanus Expressway resembles “a giant traffic jam” during rush hours.

Aaron Brashear, co-founder of the Concerned Citizens of Greenwood Heights, said that many of the elements of the mayor’s congestion pricing plan were good, but “many people in our neighborhood [also called South Park Slope] turned against it when the mayor tied it to residential permit parking.”

Residential permit parking (RPP), designed to quell Downtown Brooklynites’ fears that their neighborhoods would become “park and rides,” was “completely elitist” as presented by City Hall, Brashear added. Since the areas near Downtown Brooklyn would presumably be presented with the opportunity to institute RPP first, he said, areas such as Fort Greene and Greenwood Heights would suffer “blowback” – cars streaming into their neighborhoods to avoid the RPP restrictions that would have existed nearby.

In general, congestion pricing aimed to cut traffic and pollution by forcing more commuters onto mass transit. It would have charged most drivers $8 to drive below 60th Street between 6 a.m. and 6 p.m. Monday through Friday. Truckers would have paid $21.

The Legislature faced a Monday deadline to act on Mayor Michael Bloomberg’s proposal, which was already endorsed by Democratic Gov. David Paterson, the Republican-led Senate and the City Council. Bloomberg spokesman Stu Loeser did not immediately comment.

The plan ran into strenuous objections from legislators from outer boroughs and New York City suburbs who said it would unfairly target commuters and their constituents.

“The conference has decided that they are not prepared to do congestion pricing,” Silver said. “Many members just don’t believe in the concept. Many think this proposal is flawed. It will not be on the floor of the Assembly,” he said.