Just when you thought the subway strike was resolved, here comes more outrage racing down the track like an express. New Yorkers, who lost as much as $1 billion to the illegal strike, have been hoping the lawbreakers would be punished for crippling the city in the week before Christmas. Instead, the MTA appears to have rewarded them to the tune of $100 million. Call it the $100 million incentive to mount another illegal strike at the next available opportunity.

About 20,000 transit workers paid part of their salaries into a pension fund between 1994 and 2000 to buy the ability to retire at age 55. When, in 2000, the retirement age was lowered to 55 for everyone anyway, those workers started asking for the money back. Twice already the governor has vetoed the state legislature’s attempts to offer a refund. Now, however, the MTA has promised the union that the agency will come up with the money even if Albany doesn’t.

The governor accuses the agency of orchestrating the deal without telling him about it, even though he theoretically controls the MTA. The total give-back would come to around $131 million. Subtract the roughly $35 million in Taylor Law fines workers will be paying, and the illegal strike has still won them nearly $100 million in cash they had previously failed to secure through legal means. In other words, it pays to break the law, at least if you’re a transit worker.

The MTA claims that the contract agreement, even with the payoff, is still $77 million better for the agency – and thus for straphangers and taxpayers – than the last offer the union rejected before walking out. Nor can anyone minimize the significance of the health care premium concessions the MTA won from the union in crafting a final deal and a change to the length of the contract that finally frees New Yorkers from yuletide extortion. If one wanted to be generous, one could even suggest that perhaps the union was within its rights to push for the pension refund before the strike, but the governor was right to reject it.

Once the TWU launched an illegal strike, however, all standing was lost. To its credit, the MTA didn’t bargain away the Taylor Law sanctions to end the strike, at least not on paper. But that what it’s done in effect. That $77 million savings might have been $177 million but for the agreement. Any contract negotiation involves give and take, but the MTA has given too much and taken too little. Mr. Pataki seems to understand this. He was quoted over the weekend as calling the deal “extremely upsetting,” adding “I made it plain from the beginning: You don’t reward illegal strikes…. I am extremely unhappy that this side deal apparently exists.”

But that invites the question: Is the governor a man or a mouse? It is the governor who appoints the majority of the MTA board, and the board has yet to vote on the deal. Although the governor purports never to tell members what to do, he has made his dissatisfaction with the proposed contract known. When Mayor Bloomberg was faced with school board appointees who balked at his policy of ending social promotion, he replaced the board members and put through the policy he wanted. By our lights, it was a turning point in his career.

The governor, who dreams of being president, can learn from the mayor. If the MTA board approves this contract, it will mock the governor who appointed them – and provide an incentive for more lawbreaking by a Marxist union in the future. The right move is for the board to send the deal back to the drawing board, even if it has to risk a new strike. One of the things we learned last month is that although the strike was illegal and cost New Yorkers as much as a billion dollars and enormous inconvenience, New Yorkers can handle it. And they are not dumb. They know when they’re being mugged. They know that the failure to stand firm will spell trouble the next time around.