Port Authority finances are far from good, but they're $12 million better than expected.

Projections show the financially troubled agency is looking at a $19.5 million operating budget deficit rather than the oft-cited $31.5 million by the time the 2006-07 fiscal year ends June 30.

Chief Executive Officer Steve Bland said the authority still hopes Gov. Ed Rendell will provide additional emergency funds. If not, or if there's still a deficit, it'll be more manageable and the agency can borrow from the capital budget to bridge the gap.

"It gets us through the [fiscal] year," Mr. Bland explained after yesterday's board committee meetings, where revenues and expenses were forecast for the remainder of the budget year.

The improved financial picture guarantees riders that fares will not be increased and bus-trolley service will not be cut before mid-June. Service cuts also are controlled by a requirement to hold public hearings first and comply with union regulations covering work assignments.

Mr. Bland pointed to a number of developments that have positively impacted the money situation and put the authority ahead of projections four months into the $347.5 million budget.

Modest ridership gains and higher interest rates on short-term investments have brought in about $1 million more than estimated thus far.

A $1.1 million advertising blitz by the University of Pittsburgh Medical Center on 180 buses and 40 light-rail vehicles has nearly tripled advertising income.

Employee benefits were $2.2 million below budget because an advance in state subsidies enabled the authority to get a discount for paying health care premiums at the start of the year. In addition, premiums have been lower than budgeted.

Other gains have been made through lower fuel, wage, salary, utility and materials costs and better management of some activities.

"We're in better shape than we might have been," Mr. Bland said, in light of the original projected budget deficit of $63 million.

Mr. Rendell transferred $32 million in federal highway funds last summer to keep the agency financially afloat through Dec. 31. The $31.5 million was seen as needed to cover the deficit in the second six months of the budget.

Authority staff has yet to start work on the 2007-08 operating budget that begins July 1, mainly because the level of expected fare increases and extent of service reductions have not been determined. Also, it's unknown what -- if anything -- the General Assembly will do when its new session gets under way in January.

In its final report released Monday, the special Transportation Funding and Reform Commission formed by Mr. Rendell recommended the state create a Transit Trust Fund and raise $760 million a year in extra revenue, including a 0.9 percent state realty transfer tax.

The state money would have to be matched locally. Also, the Port Authority would have to demonstrate it is making reforms including eliminating unproductive bus routes and imposing strict controls on spending.

In other matters, the authority announced three new park-n-ride opportunities: 27 on-street spaces along Waverly Avenue in Swissvale; 24 spaces at the Franklin Park Municipal Building; and a 14-space area at the Spring Garden Loop in the city.

The Franklin Park lot is available to borough residents only. Parking permits must be obtained at the municipal building.