WHENEVER THE MANAGERS of Metro start talking fare increases, riders are understandably quick to sit up and take notice. But right now, with much less fanfare, Metro is staring at money decisions that could have a huge impact on all taxpayers, whether they use the system or not. On Monday, the contract between Metro and Local 689 of the Amalgamated Transit Union, representing nearly 5,500 bus drivers, subway operators, mechanics and other employees, will expire--and the stakes are high.

Not only have these contracts set the patterns for past agreements between Metro and Teamsters Local 922, which represents another 250 bus employees--they also involve the lion's share of Metro's costs. Wages and benefits paid to union employees account for almost 60 percent of local transit costs, according to officials. And whatever the fares don't cover is paid for by the taxpayer.

What each side has in mind at the table has not been spelled out, but it is clear that Metro has to seek some curbs on an alarmingly large and growing gap between what it is taking in and what it is spending. At the outset of talks, at least, union leaders did not appear ready to offer any significant concessions on wages or fringe benefits. Said Local President James M. Thomas, "If you're talking about giving in or giving back, then you're talking about another (local) president three years from now."

That may be, but at least talk about easing off: the contract now in effect is fat by most standards known to workers in this region, with a cost-of-living provision that has--until a downturn in November and December of last year--yielded hefty raises ranging as high as 18 percent annually. As a result of those dips in the Consumer Price Index, union members did recently take a pay cut of about 5 to 12 cents an hour. So there is a "down-side" in all this; still, the tie-in with the CPI is too tight and too compounded, and should be modified.

The difficulty in extracting such constructive changes, though, is the binding arbitration provision --approved as part of the compact between the District, Maryland, Virginia and the federal government --that also prohibits the union from striking or, in management's terms, the Metro board from "taking" a strike. Until all these parties to the compact agree to permit the dropping of the provision, the ability of Metro's managers to win significant concessions from the union is hampered. Nevertheless, Metro management should be seeking substantive changes in various work rules that also jack up costs. These complex employment practices provide premium pay for special work schedules and assignments.

If these efforts to bring about a better balance fail, Metro does have another answer quite aside from the contract--and it could hurt employees just as much or more than it could those who use the system: cuts in service. That, in union terms, is called unemployment.