Despite recurring forecasts of fare increases and severe bus-trolley service cuts, the Port Authority plans to hold the line for the fourth straight year.

The board finance committee yesterday unveiled a 2006-07 operating budget calling for a record $347.5 million in spending. The budget assumes the state Legislature will fill a projected $31.5 million deficit before the authority's fiscal year ends June 30, 2007.

The preliminary budget is expected to be approved next week by the full nine-member board.

"We're looking to the state to provide the [extra] money," authority financial manager Claudia Allen said. That preserves the $1.75 base fare and current levels of service for people who account for 240,000 rides a day.

Authority officials said dozens of other transit authorities in the state, including the Philadelphia-based Southeastern Pennsylvania Transportation Authority, are taking the same approach, adopting budgets that count on extra last-minute state funding.

They have been lobbying for years for a dedicated, long-term source of transit funding, at the heart of issues being explored by a state Transit Funding and Reform Commission appointed by Gov. Ed Rendell. The commission is to issue a final report in November, with the goal of getting quick legislative approval.

The Port Authority's 2006-07 budget includes a final $32 million transfer of federal highway funds that Mr. Rendell has "flexed" to transit for the past three years. The maneuver has sustained transit systems that collectively account for about 1 million rides a day on buses, trolleys, railcars, inclines and paratransit vehicles.

The authority's $347.5 million budget is more than $20 million higher than this year's. The big increases are in health care costs, up $4.5 million to $65.2 million; pension expenses, up $4.7 million to $15.8 million; diesel fuel, up $5.4 million to $23.4 million; general inflation; and pay increases associated with five new labor agreements.

As of this week, the Port Authority had 2,990 union and nonrepresented employees. A like number are on its pension rolls, the result of a program enabling people to retire after 25 years of service.

In other business at yesterday's board committee meetings, the authority was told a consortium that submitted a $156 million low bid to bore twin tunnels under the Allegheny River for the North Shore Connector has granted a 30-day extension to the bid. That gives the authority and the Federal Transit Administration until July 1 to decide whether to proceed with the $400 million extension of the light-rail system from Downtown to the North Shore.