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In recent weeks, San Diego County’s North County Transit District (NCTD) has warned of tough times ahead as the agency struggles with declining sales tax revenue and rising fuel costs. So it came as no surprise that the $91.2 million fiscal-year 2008-09 operating budget proposed yesterday included service reductions, layoffs and fare increases.

Adding to NCTD’s financial woes: Yesterday, Gov. Arnold Schwarzenegger proposed using fuel tax revenue normally allotted for public transportation funding to again be funneled into the state’s general fund to balance its budget. Since 2001, nearly $3 billion has been transferred from the public transit account to the general fund, according to NCTD.

The board is expected to approve the budget next month. The spending plan will take effect July 1.

Meanwhile, NCTD Executive Director Karen King announced she is resigning effective June 20 after serving the agency the past 10 years. She will take the top post at Golden Empire Transit District in Bakersfield, Calif.