WITH EVERY local and state government in this region up against the financial wall, there isn't a function or an employee immune to serious reappraisal. Services and jobs have to go, even though some kind of case can always be made for each. Metro, the historic transportation partnership of all these governments is a most complex example of today's economic pressures. How much can each jurisdiction afford to contribute in subsidies to mass transit service? How much more can be expected from the passengers' pockets through fares? Should bus and rail service be curtailed?

For the Metro budget year that starts July 1, transit officials have proposed a 3 percent increase in the contribution from local government -- not an excessive demand. Along with it are plans to raise fares, including a hefty jump in the basic fare from 85 cents to $1. Fares alone never cover costs, though on a national average, Metro covers a higher percentage of its costs through the fare boxes than most transit systems do.

Any fare increase is automatically unpopular. It also raises a question about how much should be extracted from those people who depend most on public transportation and who can least afford an 18 percent increase in the fare. But given all the red ink around the region today, the fare increases are a necessary factor in the current Metro equation.

While riders complain about fare increases, the local governments balk at the prospect of increases in their contributions. The District of Columbia, which pays the largest subsidy, already has had difficulty making its quarterly payments. At the most recent meeting of the Metro board, the D.C. representatives cited the city's dire financial situation and raised questions about how the transit agency might cut costs further if fares and subsidies weren't enough. Should this include cuts in service?

The next day, D.C. Mayor Sharon Pratt Dixon responded that she will not support cuts in service. There may be other areas of the Metro budget that can be trimmed, though it already has undergone heavy surgery. But as Mayor Dixon made clear in her first tough order to D.C. agency heads for $130 million in cuts for the fiscal year already in progress, certain "basics" must be maintained, including services for low income residents.

Other regular users of Metro around the region are not low-income residents but their choice of public transportation over automobiles is based on a delicate balance of fare costs and convenience. To raise the fares as well as the local contribution -- and then to extend the waiting times between trains and buses -- would be poor public policy up and down the lines.