MINNEAPOLIS (AP) _ Twin Cities bus drivers hit the picket lines early Thursday after 11th-hour talks aimed at averting a strike collapsed, shutting down a transit system that normally serves 75,000 riders a day.

No new talks were scheduled, and Metro Transit pulled its buses off the roads at 10 p.m. Wednesday in anticipation of the strike, which began at 2 a.m. Pickets went up at bus garages across the Twin Cities area early Thursday.

Both sides went back to the bargaining table with a state mediator Wednesday evening, and Gov. Tim Pawlenty joined them, but the talks broke down shortly after midnight.

Ron Lloyd, president of Amalgamated Transit Union Local 1005, said Metro Transit rejected the union's proposals for binding arbitration and to extend the current contract.

``The union cannot take any more money out of their pockets to settle this. ... They forced us out into the street and that's what we're doing,'' Lloyd said.

The biggest sticking point was Metro Transit's demand to reduce what it pays for health care coverage for retired employees. Some employees can get retiree health benefits at age 55 with as little as 10 years of service.

Metro Transit also sought to cut its health care costs for current employees represented by Local 1005, who include about 2,200 drivers, mechanics, bus cleaners and clerical workers.

Metro Transit raised fares and cut routes last year. Peter Bell, chairman of the Metropolitan Council, which oversees Metro Transit, said he can't ask riders or the Legislature for more money. Taxpayers already pay two-thirds of the cost of running the system, he said.

An estimated 75,000 people ride more than 700 buses operated by Metro Transit in Minneapolis, St. Paul and surrounding suburbs.

The most recent Metro Transit strike in 1995 lasted 21 days.