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Caltrain’s board is considering fare increases and service reductions to help offset a $2.3 million budget deficit.

Service reductions under consideration include eliminating Gilroy extension service, weekend service and some early morning, mid-day and late evening weekday trains.

Proposed fare increases include either a 25-cent hike to the base fare or a 25-cent increase to the zone fare, with corresponding escalations to the day pass, monthly pass and eight-ride ticket.

If approved, service changes and fare hikes would take effect in January 2011.

Caltrain’s deficit was originally projected at $12.5 million, but savings from the previous year, decreases in operating costs and an increase in state funds helped reduce the deficit to $2.3 million, Caltrain officials said in a prepared statement.

Public hearings will be held in mid-August and proposed changes will be presented to the board in October.