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New Jersey Transit recently approved a fiscal-year 2006 plan that includes lower-than-expected fare increases, and an additional $12.6 million in cost-cutting and revenue -generating measures.

To take effect July 1, the budget includes an average fare increase of 9.9 percent rather than an originally proposed 13 percent hike.

NJ Transit officials will cut another $8 million in operating costs by freezing senior managers’ salaries, eliminating 25 management positions, reducing overtime, and controlling travel expenses and third-party service contracts. The agency also identified an additional $4 million in revenue, some of which will be obtained through an increase in commercial revenue, such as advertising sales.

The measures will reduce a projected budget gap from $60.6 million to $48 million.

Despite the operating deficit, the agency will proceed with several capital projects next year. NJ Transit plans to continue replacing public address and dynamic signage systems with equipment linked to a central network that provides real-time train status and system information. The agency also will establish a Newark Operations Center at Newark Penn Station to improve communications and customer service, and enable workers to better coordinate NJ Transit operations with Amtrak and Port Authority Trans-Hudson trains. In addition, the agency will take delivery of 100 new multi-level passenger cars.