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Yesterday, the Chicago Transit Authority (CTA) board approved a plan to balance the 2007 budget by raising fares and cutting bus service.

At the direction of parent agency the Regional Transportation Authority, CTA’s 2007 budget anticipated $110 million in additional state funds. However, the state assembly still has not approved additional transit dollars and CTA is required by law to have a balanced budget.

The plan is a modified version of a contingency proposal announced in May. Since then, CTA has saved about $18 million through administrative cuts and efficiencies. The authority has saved another $20 million by implementing fiscal controls, reducing overtime, reducing consulting services, selling obsolete equipment, and negotiating labor contracts that call for wage and benefit savings, CTA said. In addition, the agency will transfer $57 million from the capital budget to the operating budget.

Plus, CTA expects to save $47.5 million through bus service reductions. The authority also will lay off almost 700 employees, including bus operators and services, mechanics and transportation managers.

Beginning Sept. 16, CTA base rail fares will increase from $2 to $2.50; one-day passes, from $5 to $6; seven-day passes, from $20 to $23; and 30-day passes, from $75 to $84. The fare hikes are expected to generate an additional $7.5 million in revenue this year.