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After cutting service and increasing fares last year to address a budget deficit, the Sacramento Regional Transit District (SacRT) is facing more service reductions as well as layoffs this year to cover a fiscal-year 2010 budget shortfall and reduced funding anticipated in FY2011.

Fare revenue is projected to fall $7 million below budget, and sales tax revenue is expected to decline 18.8 percent in FY2010 and 19.8 percent in FY2011. Combined with other factors, the fare revenue and sales tax drops will create a budget deficit of about $16 million in the current fiscal year, according to SacRT.

The agency plans to take steps to resolve the budget shortfall by June 30 as well as develop a long-term solution to the anticipated gap in FY2011. SacRT “might be forced” to drastically reduce light-rail and bus service, and lay off a “high percentage” of workers throughout its system, agency officials said in a prepared statement.

“Further compounding the current budget situation is the recent announcement by the governor to permanently eliminate state transit assistance funds,” SacRT officials said. “With no immediate resolution to restore state funding to transit agencies, the Federal Transit Administration has denied [our] request to advance the South Line Phase 2 light-rail extension and start construction in spring 2010.”

Delaying the 4.3-mile extension will increase construction costs and jeopardize thousands of construction jobs, they said.

SacRT staff will present a budget update and deficit-addressing recommendations at the next board meeting to be held Feb. 22.