The cash-strapped MTA rejected a month-long ad campaign – and a potential $25,000 to $50,000 in revenue – last week, calling the ads too obscene for public trains.

The posters, created by the Working Families Party, criticized the MTA and Mayor Bloomberg for allowing the agency’s financial problems to be passed on to riders, in the form of service cuts and rumored fare increases.

That controversy, partnered with unused ad displays on trains, fuel questions about how well the transit agency is capitalizing on potential advertising revenue. Cash from posters and signs hasn’t kept up with ballooning expenses, according to MTA budgets.

Ad payments are categorized with miscellaneous revenue sources in the MTA budget, making it difficult to know exactly how much money comes from advertising. However, the “other revenue” category – which is largely composed of ad sales – is budgeted to fall by 6 percent this year.

(“Other revenue” also includes property leasing, trademark licensing and equipment sales.)

If the 2010 budget stands, the MTA’s expenses will have risen 41 percent since 2005. Revenue from taxes and government subsidies will have risen at least that much.

But “other revenue” will have increased by just 26 percent.

The transit agency has tried to expand advertising dollars, but those efforts have been “very much harmed by the economic downturn,” said spokesman Aaron Donovan.

He noted that the MTA has launched several new advertising options in recent years: motion ads on the sides of buses, cylindrical ads on Grand Central turnstiles and wrap-around ads that have transformed Shuttle trains into giant traveling commercials for Google Maps, the History Channel and Vitamin Water.

— Simone Sebastian