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Add Caltrain to the list of California transit agencies that are facing financial hardships in the coming fiscal year after the state eliminated transit assistance funding in FY2010.

Next month, Caltrain will hold two public hearings to discuss potential fare increases and service cuts. Caltrain also is declaring a fiscal emergency, which is called when an agency is projected to have negative working capital within one year, according to Caltrain.

The agency has projected a $10.1 million deficit for FY2010 due to the loss of state funding, as well as job losses and a deepening recession that are beginning to impact Caltrain's ridership and revenue, the agency said. In addition, one-time funding sources that have been used to bridge deficits for the past seven years are "largely depleted," according to Caltrain.