The Port Authority board today approved a 2009-10 operating budget that will require a Jan. 1 fare increase.

The $362.9 million spending plan represents a 5 percent increase over the current year budget, driven by inflation in medical and dental benefits costs.

Port Authority staff in coming weeks will develop recommendations for the fare increase, which must raise $4 million.

Authority CEO Steve Bland said the maximum increase in the current $2 base fare would be 25 cents, but that options would be studied to raise the needed money in other ways, including increasing ticket and pass charges.

The authority expects to hold public hearings on the increase in September, with board adoption in October.