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Chicago Transit Authority (CTA) President Forrest Claypool has proposed a $1.39 billion budget for 2013 that takes steps to address a $165 million shortfall.

The proposed budget would maintain current service levels and freeze base fares, but stipulate "modest reductions" in discounts for CTA passes to "bring them in line with other major U.S. cities," CTA officials said in a prepared statement.

The budget also reflects a new, tentative agreement with the Amalgamated Transit Union Locals No. 241 and No. 308, which represent CTA bus and rail operators. The four-year agreement would slow the rate of growth in health-care costs, which would help cut the 2013 budget deficit by about $50 million. Agreements with a dozen other CTA unions resulted in similar changes, contributing nearly $10 million toward reducing the deficit, agency officials said.

Additional management reforms will provide "tens of millions in savings, and modest reductions in pass discounts will balance the remainder of the budget and ensure future fiscal stability," they said.

"These changes put the 'doomsday' budgets of the past behind us," Claypool said. "We're moving forward and building a modern CTA on a strong fiscal footing."

The 2013 budget is the second consecutive spending plan that does not divert capital funds to balance the operating budget, CTA officials said.