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Metro officials are projecting a major budget shortfall next year, with expenses ballooning by more than $90 million and revenue dropping by nearly $40 million, according to a budget forecast prepared by the agency’s staff.

The forecast, to be presented to board members Thursday by Chief Financial Officer Carol Kissal, is intended to offer early guidance and start discussions over how to plug one of the largest budget gaps in the transit agency’s 33-year history. The proposed $1.46 billion budget is for the fiscal year that begins July 2010.

Metro General Manager John B. Catoe Jr. is expected to present a budget to the board by December.

Metro’s leaders have warned that they might have to raise fares because of the poor economic climate. Last year, the agency consolidated bus routes, laid off hundreds of employees and tapped its rainy-day fund to close an even larger budget deficit, but it avoided raising fares. Board members acknowledge that the choices will be tougher this time.

“There is nobody who wants to raise fares, not a single one of us,” said Peter Benjamin, chairman of the board’s finance committee. “The fare decision is essentially the last one in that series of things. It’s only when you have exhausted all other possibilities that you get down to service and fares.”

As part of a compromise vote that raised fares in January 2008 for the first time in four years, the board agreed in principle that fares should increase with the rate of inflation every other year.

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