Nils Berg rides the No. 60 bus to work religiously. In summer, he takes it south from Bristol to Newport; in winter, he rides it north to Providence. Working in the state's seasonal hospitality industry, the father of two often doesn't get off work until midnight.

But under a plan by Rhode Island's public transit agency to reduce service to help close a multimillion-dollar budget hole, his bus would no longer operate after 10 p.m., including on both weekend days, starting in September. Any change, he says, would be devastating — not just because he'd be left stranded, but because businesses could lose some of the late-night clientele they rely on.

"This is vital for a business owner," Berg said at a recent public hearing in Bristol on the proposed cuts, before dashing off to catch the bus. "You cut out a bus schedule, and you are hurting businesses in Newport."

The impact of the proposed service cuts by the Rhode Island Public Transit Authority — which would affect the vast majority of the state's communities and 39 of its 54 fixed routes — is more than just an inconvenience. In a state with the third-highest unemployment in the nation — behind Nevada and California — the trims, along with any future ones, could hamstring an already struggling economy.

"Public transportation actually subsidizes most small businesses," said Charles Odimgbe, RIPTA's chief executive officer, who has called the proposed cuts "painful."

"It is an economic catalyst for any community," he said.

The American Public Transportation Association says a $1 billion investment in public transportation means 36,000 created or saved jobs, and that for every $1 invested in public transit, $4 is generated in returns. One typical measure of a state's business friendliness is its transportation infrastructure.

Public transit also, of course, gets people to their jobs. According to APTA, nearly 60 percent of transit trips are to the workplace.

A study released in May by the Brookings Institution found a disconnect between public transportation and job accessibility, with the "typical" metropolitan resident able to reach about 30 percent of the jobs in his or her area by transit in 90 minutes.

Grouped together, Providence, New Bedford and Fall River ranked 59th out of 100 metropolitan areas on accessibility of jobs. The most accessible area was Honolulu; the least was Poughkeepsie, N.Y. In New England, the Boston-Cambridge-Quincy area ranked 34th, while Hartford was 47th.

Under RIPTA's proposed cuts, still subject to the board's approval, some routes would be eliminated altogether. Some would operate less frequently. Service from several Park 'n' Ride locations would be scrapped. Holiday service would be discontinued. Some beach service is also on the chopping block — even though officials say demand far outstrips capacity on some buses.

Stephen Hourahan, a senior adviser to Gov. Lincoln Chafee, said that in devising the list of proposed cuts, Rhode Island tried to protect lines with high numbers of commuters to major employers. Separately, the state will begin a study to determine where service is most needed, and whether the system is carrying people to their destinations most efficiently.

The cuts, whatever shape they ultimately take, are being forced by simple economics. RIPTA faces a $4.1 million deficit for the current fiscal year, due primarily to the rising cost of fuel to operate its fleet and a flattening of revenue from the gas tax since fewer gallons of gas are being purchased, presumably due to higher gas prices. The system also no longer has federal stimulus funds to close any gap.

Those are problems transit agencies across the country are facing against the backdrop of the Great Recession. By one survey, more than 80 percent of U.S. transit systems had cut service, raised fares or both since the downturn began.

Rhode Island's so-called "farebox recovery" — the percentage of a system's costs covered by passenger fares — is between 22 and 24 percent, Odimgbe said. The national average is about 32 percent, according to APTA. Rhode Island doesn't charge some seniors and the disabled to ride, and state officials have not been receptive to changing that, said Mark Therrien, the system's assistant general manager.

While fare increases help — and RIPTA raised fares last year — transit officials say the state needs a different funding source, or it will have to continue to cut service. Being reliant on the gas tax brings a public policy Catch 22: When fewer people drive, because of high gas prices, environmental concerns or other reasons, the transit agency gets less money, in turn forcing cutbacks in service — when there is a demand for more.

Last year's RIPTA ridership just surpassed 18 million, a slight increase from the previous year even with a 1.5 percent fare hike.

"Rhode Islanders want the service," said Therrien.

Odimgbe said public transit is a lifeline for what he called the "working poor." The Brookings study noted that lower-income residents rely on public transit more than workers on average, at least in metropolitan areas.

Many can't afford to buy cars, much less fuel them, at some $3.80 a gallon, Odimgbe said, making them reliant on the state's bus system.

A one-way fare in Rhode Island is $2, no matter how far the trip, and a monthly pass costs $62. Philadelphia's base bus fare is also $2, with a monthly costing $83. Boston charges $1.50 for a single bus trip paid in cash, while a monthly is $40.

"In economic times like these, we need more bus service, not less," said Harris Gruber, a Tiverton resident who testified at the Bristol hearing. He doesn't even take the bus — there isn't one in his mostly rural corner of the state. He's just worried for those who do.

In that group are the 1,400 students from Roger Williams University who used buses last year for a total of 78,690 trips, according to Scott Yonan, director of special projects at the university. They often went from Bristol to Providence to shop at the mall, see a movie or watch a Bruins game. They hung out at bars and restaurants. In other words, they spent money the economy badly needs.

"To eliminate service after 10 o'clock, those students aren't going anywhere," Yonan testified. "It's a shame."