Tuesday, March 14, 2017

Metro Transit's Structural Deficit

At first, it might seem reasonable: our local public transit system, Metro Transit, is projected to have a $74 million deficit in 2018. Right now the general bus and light rail fare is $2.25 during rush hour and $1.75 during off-peak hours, and it last was increased (by $.25) in 2008. That’s 10 years between fare increases, so fares haven’t kept up with inflation. Why not raise fares to make the numbers work?

But it’s not reasonable. Metro Transit has made big improvements in service since 2008 and ridership has increased substantially, too. More money is coming in than ever before from riders. The idea that fares should pay for most of public transit's cost is retrograde thinking in a world where we need to use way less carbon and get people out of cars. And cars are subsidized in all sorts of ways that are not acknowledged.

Unfortunately, our transit system is funded largely by fees paid when people buy cars in Minnesota, and the number of people buying cars is going down, which is causing the deficit. You see the problem there? We (and the biome) want people to stop driving cars, but Minnesota is funding the thing that replaces cars with a fee on cars. It makes no sense. It can't work in the long or even short term.

The column at right shows the current projected deficit. MVST is the Motor Vehicle Sales Tax.

Several scenarios

I learned all of this at a meeting of the Metropolitan Council’s Transportation Committee yesterday where they were considering fare increases. The committee and then the full council will likely vote on several scenarios for increased fares:

  • $.25 added to all fares
  • $.25 added to regular bus and train service, $.50 added to express and Metro Mobility
  • $.25 added to regular bus and train service, $1.00 added to express and $.75 to Metro Mobility
Ridership losses for each of those changes were given at the meeting and ranged from 5 to 8 percent depending on the type of service. But revenue increases with the fares, of course, so it nets out to a higher dollar amount.

An alternative (or additional) funding mechanism, which would make these changes unnecessary, would allow counties to add a half-cent sales tax. That would generate close to $300 million dollars and close the funding gap, and also make transit less reliant on car sales for its funding. But our state legislature has so far been opposed to allowing counties to tax themselves, in keeping with their general preemption mindset of telling local governments what to do.

I support the sales tax approach. Transit should be funded through the broadest base possible, and in my opinion should be free to end-users, as it is in places like Talinn, Estonia. A significant portion of the cost of operation goes into collecting fares in the first place (think of the IT costs of running a stored value card system, for instance). But if we can’t get rid of fares altogether, they should be kept as low as possible and low-income folks should receive discounted fares.

A little good news

On that point of discounting fares, there were two pieces of good news in the proposal:
  • One option proposed would make Metro Transit’s recent TAP experiment (Transit Assistance Program) permanent. I’m not sure of its extent in this permanent scenario, but the pilot program gave $1.00-per-ride passes to low-income people, and obviously that would help offset fare increases.
  • Another option proposed would eliminate the peak surcharge on non-express routes for seniors, youth, and people with disabilities: they would pay their reduced fare (currently $.75) at all times.
When ridership decreases, where do the riders go?

A 5 percent decrease in bus and light rail riders equals 2.5 million people a year, or almost 7,000 a day (365 days a year) or more than 9,600 a day (using only business days, when most transit use occurs).

Where do those people go (or not go)? How many of them instead drive a car or take a cab or Uber and add to pollution, carbon dioxide, and congestion? How many are kept from doing necessary daily activities and lose jobs or other social connections they need?

As several members of the public said in testimony before the committee, public transit is our mobility. One woman with epilepsy said she can’t drive even if she wanted to. What is she supposed to do?

If the fares go up, Metro Mobility (Metro Transit's service for people who can't use regular bus service because of disability) rides are estimated to decrease by 142,000 riders in 2018 and 213,000 in 2019. That saves a lot of money because Metro Mobility’s subsidy is very large, and the number of people using it is going up as our population ages. The amount of revenue netted from the fare increase on Metro Mobility is only about a third of the amount saved by cutting out riders. So there’s a big incentive to increase Metro Mobility fares and push away riders. A negative, contradictory incentive.

Met Council staff reported they have already carried out a Title VI analysis of the proposed increases. They say the proposals won’t have a disparate impact on low-income people and communities of color, but that sounds like self-serving math to me. It just means the number of people with more income who don’t ride transit is within some predetermined "acceptable" range when compared to the number of people with less income — but the impacts are not the same. The more-well-off people will drive a car instead or take a taxi or Uber (or maybe pay more money for the bus and not really notice it), but the poor people will have their mobility impaired or have more money taken from them, which they needed to use on something else. Taking $.25 five days a week from a person who makes $20,000 a year is not the same as taking $.25 from someone making $75,000 a year, obviously. How is that not a disparate impact?

The sign I brought along.

Service cuts

All of these fare increases net out to just $15 million in new revenue—which obviously isn’t a large percent of the projected $74 million deficit, so what kind of service cuts are they thinking about to make up the rest of the money hole? That was not covered in the meeting.

I am actually more afraid of service cuts than I am of a $.25 fare increase, and you already know how much I hate the idea of the fare increase. Both are bad and together they create a death spiral for a transit system, but service cuts are a bigger contributor to the death spiral than fare increases.

In testimony, local activist Mel Reeves called on the Met Council to rally the public to pressure the legislature in support of transit funding through the sales tax. A committee member responded that we (the public) need to tell the legislators our stories of the effects fare increases and service cuts have on us.

One committee member asked how much ridership would have to increase to make up for the deficit, and staff promised to have that information for the committee's next meeting. I don’t think that’s realistic to expect, though, especially if service cuts are part of the picture.

Convincing a Republican-majority legislature to fund transit outright, when they have gotten it into their heads that transit is a special interest, is a no-win proposition. Our best bet is to persuade just enough members, through personal contact with people from their districts, to allow the special sales tax.

That's not in any way an easy thing to do, though. (These are the same people who won't give a hearing to a bill introduced by their own Republican colleague to stop health insurers from overruling doctors in ways that harm patients... he now uses a wheelchair because of these practices and knows whereof he speaks.)

I am not hopeful, but I'll be there to fight for transportation for all.

These stickers were passed out to transit supporters.


Interesting facts:
  • Only 10 percent of other transit systems around the U.S. have a peak/off-peak fare differential. Metro Transit is very interested in simplifying its fare structure so it's more understandable, and I think that’s a good idea.
  • I learned what Transit Link is: a service available in the suburbs (in places where there is no regular bus service). Riders call by phone to arrange service. A trip less than 10 miles is $2.25 each way; between 10 and 20 miles is $4.50 each way, and more than 20 miles is $6.75 each way. ADA-certified riders pay a maximum of $4.50 per direction. It has limited hours compared to regular buses: 6:00 a.m. to 7:00 p.m. Monday through Friday only. The cost and subsidization per mile is very high (almost $20 per passenger).
  • Light rail has the lowest subsidization ($1.84 per passenger). Second lowest is on urban local buses ($3.16) and third lowest on express buses ($3.86). Suburban local buses are subsidized $5.22 per rider, but even that sounds low compared to Northstar Commuter Rail ($18.31), Transit Link ($19.92), and Metro Mobility ($23.94). The idea of subsidy sounds value-free, but is actually value-laden. It doesn’t take into account that transit riders (at least on the high-density services like buses and light rail) are taking a significant number of vehicles off the streets and highways, which means less traffic and a faster trip for everyone else.

The full presentation by Met Council staff can be seen here.

No comments: