Metro will cut up to 335 jobs and slash spending on supplies, travel, overtime and temporary employees in an attempt to cope with the worst financial crunch in the transit system's history.

"These actions are drastic," said William A. Boleyn, who takes over Monday as Metro's acting general manager. "This has never happened to the authority before."

Suffering from the same economic squeeze as state and local governments throughout the region, Metro will raise rail fares annually beginning next summer. Although the amount of the annual fare increase was not set at yesterday's board meeting, Metro board members have been discussing a minimum increase of 5 percent a year for the next five years, which would raise the average rail fare to $1.50, compared with the current $1.18.

To deal with the current budget deficit of $12.5 million, Metro officials said yesterday they will not fill most open jobs, which could affect up to 335 positions. Metro has 8,447 permanent employees.

Metro officials and board members said they hope to carry out the economic measures without cutting train and bus schedules or reducing maintenance. But many officials -- including the managers of Metro's rail and bus operations -- acknowledged that it will be difficult to do that. About 1 million rail and bus trips are made on the system each day.

"We expect it to be difficult, no doubt about that," Boleyn said. "But we expect to accomplish it" without service reductions.

About 6,500 Metro employees work in the rail and bus divisions, so an across-the-board hiring freeze will be felt immediately. Positions that are critical to the rail construction program and Metro's operations -- such as train and bus operators, mechanics and station managers -- will be exempt from the freeze.

"It's going to be extremely difficult," said Fady P. Bassily, Metro's rail manager. "But the service standard isn't going to be sacrificed."

Today is Carmen E. Turner's last day as general manager, and the actions yesterday underscored the budget challenges that will face her successor as Metro grapples with higher costs, declining growth in ridership and fixed subsidies as the local economy is slumping. Turner starts Monday as the manager of the Smithsonian Institution.

Rising diesel fuel costs brought on by the Persian Gulf crisis and a drop in the growth of ridership has led to the $12.5 million deficit in the current budget, a revision upward from the $11.7 million shortfall projected in November.

To make up the difference, Metro either could ask local governments for larger subsidies, or cut $12.5 million. Local governments are in no condition to contribute more to Metro, so the board was forced to trim $12.5 million.

The largest reduction is about $7.2 million in personnel costs, including $4.2 million to be saved in salaries from the hiring freeze. About $5.2 million will be saved by trimming 5 percent in supplies and other non-personnel costs.

"It's definitely going to mean a change in the way business is conducted in the authority throughout the rest of the year," said board Chairman Mary Margaret Whipple of Arlington.

Although the cuts will be painful, some board members said, the actions are no different from those being taken by state and local governments. Virginia has a $1.9 billion budget deficit and may lay off more than 1,000 workers; Maryland is planning to lay off 1,800 employees because of a $423 million shortfall; Montgomery County schools will freeze hiring, and Prince George's County will give pink slips to 190 workers.

For a long time, said board member Gladys W. Mack of the District, "our attitude about spending was quite different from those paying the bill" -- the local governments. "This brings us all in the same boat."

More budget trouble is ahead. Boleyn told the board that the budget for the year beginning July 1, which will be released in the next few weeks, will include the high costs associated with the opening of the first Green Line stations in Northwest Washington and Anacostia and the Blue Line station at Van Dorn Street in Alexandria, which will open June 1. Boleyn said he could not provide figures yesterday, but said the added revenue is not expected to meet costs.

A permanent, yearly fare increase is one way to deal with these financial problems, members of the board's budget committee said yesterday in agreeing to raise fares.

"We want Metro to carry as many riders as possible," said budget committee Chairman Cleatus E. Barnett of Montgomery. "Low fares allow us to accomplish that goal. It's become necessary to accept some erosion of that goal to meet some of the fiscal realities we're facing today."

The fare increases probably will be tied to an index of Metro's costs, such as fuel, electricity and bus and rail parts, rather than the consumer price index, which measures certain costs and the price of goods over time, officials said.

The committee chose not to discuss the amount of the fare increases until members have more information about how fares could be set according to the Metro cost index.