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(State House News Service circulated the following article by Amy Lambiaso on March 29.)

BOSTON — MBTA commuters would face higher fares during rush hour under a proposal the T’s general manager, Michael Mulhern, introduced to lawmakers yesterday as part of his broad outline for stabilizing the cash-strapped system.

Mulhern, who is scheduled to retire from the MBTA on June 1, said yesterday that even after raising fares twice during the last six years, increasing parking fees and reducing service this year, and recently laying off nearly 50 employees, the agency is still struggling financially.

And while another fare hike isn’t likely for 18 months, Mulhern said that in addition to raising fares for rush-hour riders, he also envisions offering discounts to those who ride during off-peak hours.

”I’d like to think our next fare increase isn’t an across-the-board fare hike,” Mulhern said yesterday after briefing members of the Legislature’s Transportation Committee on the MBTA’s budget proposal for next year. ”The subway lines are saturated during the peak periods. We need to take better advantage of capacity that’s not used, and most of that capacity is during the off-peak.”

Mulhern, who announced yesterday that he has accepted a job at Jacobs Engineering Group Inc., a technical services company, said he plans to remain actively involved with the agency after leaving.

Khalida Smalls, who coordinates the T Riders Union, said yesterday that Mulhern’s fare-restructuring proposal is one of a number of options being discussed informally with advocates.

Another proposal is to raise the base fare for trains or buses, while providing discounted train-to-bus transfers.

Mulhern also said he is looking to eliminate nearly 100 Green Line crew members, mostly train drivers, to bring the subways to the same staffing level as other light rail systems in the United States. That change is being negotiated with union representatives.

In addition, the MBTA plans to save roughly $25 million a year and ”redeploy” 50 fare collector positions with the introduction of its automated fare collection system. That system will begin in Blue Line stations in late April and be extended to other lines this summer, with the full installation in early 2006.

Mulhern also said he is negotiating with the unions to control healthcare costs and benefits that have skyrocketed in recent years.

Steven McDougall, president and business agent of the Boston Carmen’s Union, declined to offer specifics on negotiations with the MBTA. He called it ironic that Mulhern would blame the T’s fiscal problems on wages and healthcare benefits for its workers, considering that Mulhern negotiated that contract.

”If he’s calling us Frankenstein, then he’s Dr. Frankenstein because he created us,” McDougall said.

After being pressed by Representative Brian Knuuttila, Democrat of Gardner, about commuter rail service being extended to his district, Mulhern said increasing service to Worcester to 20 trips per day and making improvements on the Fitchburg line are the agency’s top priorities before tackling other expansion projects.

In his recently released 20-year blueprint for the state’s transportation network, Governor Mitt Romney proposed having the state assume responsibility for costs associated with new transit expansion projects, an idea Mulhern immediately supported.

”I think for the first time it’s truth in advertising,” Mulhern said. ”For me, that was an acknowledgement that we can’t afford any expansion projects” without state assistance.