AMHERST, Mass. (AP) — The public transit agency that serves much of western Massachusetts is considering fare hikes and service cuts as a way to address a possible $3.1 million budget shortfall.

The Pioneer Valley Transit Authority says the shortfall is based on anticipated funding for regional transit agencies from the state, which is not keeping up with inflation, rising costs, and revenue loss from a ridership decline.

The PVTA received $22.9 million in the state budget for this year's operations, $600,000 less than the previous year. It also gets revenue from assessments to the 24 communities it serves, including Springfield, Northampton and Amherst, as well as the region's colleges.

Officials say the agency hasn't raised fares in a decade and are proposing a 25 percent hike that would bring in more than $900,000.