Business is booming for the Charleston Area Regional Transportation Authority, but service cuts and a fare increase could be on the horizon nonetheless.

With the economy limping along, funding for the bus system from the half-cent sales tax has been reduced, creating an expected $1.4 million budget gap, CARTA Executive Director Howard Chapman said Monday.

Bus ridership has been at record levels, but like most public transit systems, CARTA only covers a fraction of its expenses with passenger fares -- about 30 percent most recently. The rest comes from public money, such as the half-cent tax, direct payments from businesses that pay CARTA to transport workers or students, and other sources.

Chapman said CARTA's board of directors will review bus routes at a meeting July 21. The meeting location has not been determined.

A five-year plan for CARTA suggests that the Route 106 Otranto/Stall route and the Route 212 DASH bus face the greatest risk of being discontinued, for a potential savings of about $440,000 yearly.

"We have several routes that there may be a need to look at," Chapman said. "Whatever we do with routes will have a bearing on whether we need a fare increase and how large it would need to be."

CARTA last raised fares in October 2008, by 20 to 25 percent depending on the type of fare. High gas prices were cited as the reason for that fare increase.

Despite the fare increase, local bus ridership rose to record levels in 2009 and has been hitting new highs this year.