The Port Authority has begun preparing for service cuts that are more than twice the size of the reductions that took effect in March, when thousands of riders were stranded and others jammed into overcrowded buses.

CEO Steve Bland told the authority board last week that planning has begun for a 35 percent reduction in service hours that will come next fall if Gov. Tom Corbett and the Legislature fail to act on a statewide transportation funding shortfall.

"At the moment, there is no indication that a transportation funding solution is on the immediate horizon," he said.

The authority faces a projected $64 million deficit in the budget for July 2012 to June 2013, caused by runaway health care and pension costs, rising fuel prices and insufficient revenues, including state and county aid that has mostly remained stagnant or decreased.

It is limping through the current fiscal year by using the last $11 million of a $45 million emergency infusion provided last year by outgoing Gov. Ed Rendell and $29 million of its roughly $39 million in reserve funds.

If there is no action in Harrisburg, the authority will release details of planned cuts in January and begin a mandatory public comment period before the reductions are implemented in the fall.

Mr. Bland said the cuts would include elimination of 30 to 40 of the remaining 98 bus routes; layoffs of 500 to 600 of the agency's 2,500 remaining employees; and closure of one or two more bus divisions.

"This would be the worst possible outcome for everyone who relies on transit," he said.

Spokesman Jim Ritchie said frequency of service would likely be reduced on all routes, and deep cuts would occur in off-peak and weekend service. The routes most likely to be eliminated are longer suburban runs that have higher operating costs than inner-city routes, he said.

Ken Zapinski, senior vice president of the Allegheny Conference on Community Development -- which has lobbied for a statewide transit funding solution -- said it was "prudent and responsible" for the authority to prepare for service cuts.