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Yesterday, the Washington Metropolitan Area Transit Authority (WMATA) unveiled a proposed $1.7 billion fiscal-year 2010 budget. The good news: It doesn't include a fare increase. The bad news: It does include service and job cuts.

The $1.3 billion operating budget includes a $176 million funding gap. Expenses are projected to increase by $159 million compared with last year because of stock market losses in the pension fund, and rising energy and labor costs. In addition, revenue is expected to drop by $17 million because of declining investment interest, less revenue from fiber optics and lower property rental incomes.

To cover the gap, WMATA officials have proposed cutting expenses by $103 million and trimming $73 million worth of service. During the next several weeks, the agency will work with local governments that help fund WMATA to develop service cut recommendations to present to the board. The agency expects to hold public hearings on the cuts in March.

WMATA also has proposed cutting 891 positions, about half of which are vacant. In 2007, the agency eliminated 254 positions.

The authority also has proposed a $478 million capital budget, which includes funds to repair stations, track and trains, overhaul escalators, and improve aging facilities.

The board is expected to approve a final budget in June. FY2010 begins July 1.