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New Jersey Transit has proposed raising fares an average of 10 percent in fiscal-year 2008 to help cover rising operating costs.

The agency is facing an estimated $60 million increase in operating costs compared with FY2007 due to expanded service, inflation, rising utility expenses, and passenger car acquisition and maintenance costs.

NJ Transit proposes to cut $20 million in expenses through benefit savings and administrative cost reductions, as well as generate additional revenue through leveraged leases, advertising and property sales.

Officials will provide the agency’s board a more specific fare increase proposal next month.