ECB over at the Slog gave front page treatment to a post from Matt on Orphan Road that claims that Seattle subsidizes King County’s bus operations. In fact, the opposite is true: The rest of King County subsidizes Seattle’s bus service. Seattle has more service hours per the revenue it brings in compared to the other Metro subareas (the subareas are Seattle, East King, and South King).

Matt’s “revenue” figures are fare-box revenue figures — in other words, the money you give the bus driver when you enter the bus. However, the bus system is primarily funded though sales tax receipts. While Seattle gets the most bus service of any subarea, it does not provide a proportionate amount of sales tax receipts. This basic fact, that King County subsidizes Seattle bus service, is the rationale why the 40-40-20 rule exists: That is, 40% of new service hours go to South King, another 40% go to East King, and the final 20% go to Seattle.

Matt’s post correctly illustrates that Seattle bus service is most cost-effective, but the raw numbers also neglect that there are hundreds of thousands of people throughout the county who don’t live in Seattle and who pay for bus service. And frankly, I think when we’re talking about cost-effectiveness or thinking of the word “profit” we’re not in transit-friendly territory. In truth, public transit systems are not always about the most cost-effective routes — otherwise we’d only have buses at peak times and minimal service throughout the rest of the day. And when the entire county pays for transit service, I think it’s fair to expect that much of its population should have some access to it.

Now, if Metro — given the woeful financial state it is in now — were to begin cutting bus service then I would hope that the least cost-effective routes have their service curtailed regardless of where those routes are located. Matt’s numbers illustrate that Seattle routes are generally more cost-effective than East/South King County routes.

Us in the transit community have to be careful not to Seattle boosterize, in my opinion. Our transit comes mostly from the county (Metro) and regional (Sound Transit) level. We do get a ton of bus service and light rail is running through our great city — so we are not getting the short end of the stick. And the rest of King County loves transit, too (just look at the success it has at the polls!). There is no reason to make this an us versus them argument. A lot of us live in the city and work on the Eastside, and a lot of us live across the county and work in the city.

I’m sure Matt just overlooked the sales tax revenue, and ECB didn’t mean any harm.

Update: The comments have produced some numbers. Take a look.

47 Replies to “In Fact, King County Subsidizes Seattle Buses”

    1. Seattle contributes untold millions in subsidies for the rest of the county through a variety of means, like port subsidy, road maintenance, etc.

  1. This PDF lists sales tax revenue going into the General Subfund as 154mil with a rate of 0.85%, so taking that to the .9% granted to Metro Transit, we get around 160mil.

    Seattle gives Metro around $210mil by the above rationale when including farebox revenue.

    When anyone asks if Seattle is paying their share for increased service, you can tell them they only pay $210mil out of hundreds and hundreds of millions.

    1. Went and checked Bellevue’s budget– they tip a tax contribution of around $50-55mil to Metro; Seattle’s sales tax take is 4.5x that of Bellevue, so $200mil to $250mil in sales tax revenue given to Metro Transit is about right.

      That’s, what, 1/5th of the yearly Metro budget? 1/10th?

      1. You’re now seeing why I didn’t include numbers in this post. It’s hard to get all the information.

        This PDF says that 2007 revenues were $468m, with $400.3m of that coming from sales taxes and fares.

        Your logic above does seem right. Including fares, Seattle is paying $210m on about $400m, or about 53%.

      2. Yes, but the key fact is that 73% of bus service at any given monent is in Seattle.

        53% vs 73% means that Seattle is getting a better deal out of Metro than other sub-areas.

      3. And per http://transit.metrokc.gov/am/reports/2007/2007-RtPerf-PeerComp.pdf:

        Total Metro service hours: 2,194,542
        Seattle service hours: 1,273,461

        Or, 58%. So, Seattle pays for 53% of the transit and gets 58% of the hours.

        This is not a massive subsidy, and of course it is a net social good that Seattle has the best transit access. Rather, I’m not arguing that King County should be bothered that they’re paying for our bus service. Bus service is always subsidized. I’m saying that the claims that Seattle pays for everyone else’s buses isn’t true.

        AJ, thanks for helping me get the numbers.

      4. I spoke to Andrew and his 73% is a bit old and probably too high.

        But the 58% number I quote ignores that many buses are paid for by the other subareas (South and East) and head into Seattle. So we probably get even more transit service than my percentage indicates.

      5. That ignores routes like the 101 which act like local service through the city but are paid for by the other subareas.

      6. Yeah, one route that I noted is the 194 which almost all of us have taken from Seattle to the airport. Guess which subarea funds that? South King.

        So indeed, you can see my 58% is probably too low.

      7. 20/40/40 is meant to even out the service as Metro explained to STB a year ago– however, the troubling thing is that there seems to be no end to the policy listed and that Metro is intent on applying 20/40/40 to hours freed up by Central Link. If the policy goes on to beyond 2016, we’ll also lose service via U-Link’s opening, although that in and of itself is hard to miss due to the capacity carried and the number of buses rendered obsolete. What happens when service is equalized or, worse, Seattle begins to lose service hours versus increased usage?

        I have no problems with strategic service upgrades (and prefer them) but I really wish certain things would be fixed, like having more high capacity buses in Seattle where necessary. I would have no problems with the #2 stopping short of 34th just to be an articulated at the 7:10 and 7:25 runs.

      8. AJ, I do not believe that freed service hours are re-allocated under 40/40/20. That would be disturbing indeed. But perhaps I’m wrong?

      9. I can’t find anything that points to Metro changing service far into the plus column in the Rainier Valley after Central Link opens. In fact, several of the suggested routes for the service change seem to be of the infrequent variety.

    1. That’s definitely an argument worth having, but we should obviously have all of our facts in order before trying to verbalize the case for/against the subarea rules.

      1. I don’t think it should be taken away, I think it should be rethought with a concrete timeline for re-addressing it and perhaps scaling it back. Heck, keeping it as-is may even be the best idea if we’re getting a streetcar network in Seattle.

      2. Everything should be re-thought with the Metro budget crisis, and the 40-40-20 rule should be no exception. Good point.

  2. It’s not at all suprising that fare receipts and ridership is much higher in Seattle, because that’s where all the buses are!

    1. And also the density.

      I think a good argument for 40-40-20 is to facilitate the type of smart development around transit centers we’re seeing in Bellevue and Redmond. To give these folks an option besides the car leads to better suburbs.

  3. Service hours will stay in the same subarea as light rail comes on line. The 40-40-20 legislation only applies to new service, not redistributed service, added in the county. This includes Transit Now, although the partnership program allowed Seattle to get more service hours back for speed and reliability improvements.

    40-40-20 was pushed through by suburban Democrat, Julia Patterson, and the suburban Republicans on the council. At the time, I believe Seattle had 63% percent of the service. King County Executive Ron Sims had the ability to veto the legislation. If he vetoed the bill, the Seattle Democrats probably had the votes to overturn it. He chose not to.

    As I see it, the debate here is really between two important visions for transit. Both are valid. Seattle will argue that our buses are packed, we ride transit dammit, we pay our way at the farebox. But in the suburbs the argument is basically, “if you build it, they will come”. You can’t ask people in East and South King County to ride the bus if it comes infrequently or only during rush hour.

    40-40-20 should be revisited however. It delivers too much service to East King County for the ridership there. Development there discourages transit ridership in many areas because of the number of cul-de-sac developments. Many parts of South King County have ridership that rivals Seattle because they are transit dependent communities with limited incomes. Seattle and South King actually have more in common transit-wise than the Eastside.

    The real solution is to keep growing the transit pie. We need to find ways to increase the funding for transit to match that spent on supporting an unsustainable automobile future.

    Great post and discussion, thanks.

    1. Thanks for the comment, it was very substantive and balanced.

      Do you think that modern development on the Eastside still trends toward unsustainable? Look at downtown Bellevue, Kirkland, and Redmond — for example. Or are these locations just too small to matter compared to the rest of the Eastside?

      1. I love the development in the city cores on the Eastside. I am also excited by the potential to add density in the Bel-Red corridor with East Link. Transit can serve these areas well.

        I am less excited about Redmond Ridge, Novelty Hill, the Sammamish Plateau, and the development at Snoqualmie. The routes serving these areas are generally dogs. And why not, the developments there encourage car use for any trip. And I am really not that excited about building more park and rides at 30-60K a stall.

        There is a wealth of information in this annual Metro report from 2007. On page 13 of the pdf you will see a comparison of how Metro measures success in each subarea. You will see that the standards for the West subarea are much higher.

        http://transit.metrokc.gov/am/reports/2007/2007-RtPerf-PeerComp.pdf

  4. If a bus “heads into Seattle” (comments by John Jensen at 11:53 and 11:55) such as the 194, is this evidence of Seattle being subsidized by Metro, or Metro taking people where they live or arrive (out of Seattle or the airport) and taking them to where they want to go?

    Seriously, who should fund the 194 and 174? Are these County routes or City routes? How do you determine? Where they go? Where they originate, where the people who ride them live? I am being serious. Is the 16 a downtown route, a Wallingford route, or a Northgate route? Who should “own” and pay for that bus if it was funded by neigborhood?

    1. Good questions. It is impossible to break down the ownership by neighborhood. But in the case of the 194/174 which we both bring up apparently Metro determined that the bus provides more utility for South King residents compared to Seattle residents. There are, of course, more South King stops and probably more South King riders in the peak direction. I believe Metro has correctly classified the route as a South King route.

      I’m not saying that the 194 is evidence that Seattle is being subsidized — some other numbers prove that — I’m saying that as Seattle residents we get utility even out of those routes like the 194 that aren’t included in our subarea service hour counts. This increases the amount of service hours we’re getting in Seattle, taking the 58% number I brought up earlier to a higher ceiling.

      Similar circumstance happen with Sound Transit. Seattle doesn’t pay a single dollar for ST Express bus service, but nearly all of the ST routes connect to downtown Seattle. All of this is fair, of course. There is a reason for these buses to come to Seattle without us paying for them — we’re the densest and richest part of the region. But from Seattle’s perspective, we do get a pretty good deal.

      1. Are any three-digit routes allocated to Seattle in all this? If North King is counted, other than the 3xx’s? Metro may just be going by the hundreds digit for the vast majority of routes that are numbered below 400.

  5. The “West” aka “North” subarea is more than just Seattle, including Shoreline and Lake Forest Park. It generates about 37 percent of METRO’s sales tax revenue. That it also generates 65 percent of farebox revenue is an important consideration in evaluation subregion equity.

    1. According to http://transit.metrokc.gov/am/reports/2007/2007-KCDOTAnnualReport.pdf, farebox revenues represent only 17% of the revenue while sales taxes represent 68%.

      Where do you get your figures for the North/West subarea contribution for sales taxes?

      AJ and I tried to calculate these numbers from Seattle documents (ignoring Shoreline and Lake Forest Park), but our numbers seem to vastly disagree with your percentage. Though, with your figures, the subsidy to Seattle would be much higher than I had earlier stated in this thread.

  6. Sigh. There needs to be some better researchers out there to get to the bottom of this. If you want reliable sales tax information for Metro and the cities, go to http://dor.wa.gov/Content/AboutUs/StatisticsAndReports/Default.aspx
    You will find distribution of sales tax revenue by the state to Metro and the cities as well as taxable sales for every city and county. Filtering to King County, take taxable sales for 2007 and group by subarea. Multiply the sum for each by .009 to get the sales tax revenue for each subarea FROM INCORPORATED CITIES. Then compare that with sales tax revenue distributed to King County. There should be a gap. That gap is for unincorporated areas. I don’t know the best split, but I would suggest 50-50 between East and South is fine. You may also simply leave it a lone if you are interested only in West Subarea.
    What you are seeking is not the hours of service in Seattle, but rather the total subsidy in Seattle. This would be found by taking the total cost investment in the subarea and then subtracting out farebox revenue. This subsidy number should be compared to the sales tax generated by the subarea. That tells the size of the subsidy. Subtract West Subarea sales tax from that number to get the total subsidy from the other sub-areas.

    Yes, the other subareas subsidize Seattle. That is why they like 40-40-20. But two more data points to look at: divide total subsidy from other subareas by total West Subarea riders. Also take the total subsidy per subarea and divide by total riders in each subarea. You will find that hands down investing a dollar of sales tax in Seattle produces far more riders than a dollar of sales tax does in East King County or South King County.

    Please look more carefully at the Route Performance Report to fact-check your statement concerning peak and off-peak routes (the statement was made that if it if cost-effectiveness was only measure we would have peak-only service). You will see many loser peak only routes. Look at the Route 45 or 46. How about the 170 or 250? Now look at the 253 or 15 in the off-peak. Big difference. The route performance report does not look at the riders per platform hour which take into account deadheads. Peak routes like from Issaquah Highlands have a fair amount of deadhead time. They would not look as attractive as this report makes them to be if it was reporting total cost. Good route design and mixed land uses suggest that all-day service can be just as effective as peak-only service.

    Cheers!

    1. Total 2007 revenue from Seattle, Shoreline, Lake Forrest Park: $160,724,889.57 (per http://dor.wa.gov/docs/reports/Local_Retail_Sales/allcy07.pdf). The error for my earlier calculations were, thus, 0.45%. I don’t think it really causes us to reach different conclusions.

      One major difference I spot is that this site reports $428m in sales tax revenue for Metro (see http://dor.wa.gov/docs/reports/2007/ltd2007/Table3-2007.pdf). A KCDOT report says that the sale tax receipts were $322m (see http://transit.metrokc.gov/am/reports/2007/2007-KCDOTAnnualReport.pdf). I cannot explain the discrepancy — can you? (Edit: It looks as though the second document doesn’t include capital investments. Breaking that out would be tiring.)

      Using Department of Revenue figures the subsidy is even higher for Seattle:

      2007 tax receipts for Metro: $427,579,378.18
      2007 tax receipts for West Subarea: $160,724,889.57

      (West Subarea pays 37.5% of the sales tax revenue.)

    2. In terms of the peak/off-peak thing, I was being hyperbolic. Pretend I meant the peak hours for a given route. Given peak direction, bus storage, shift splitting, deadhead times, and the desire to provide transit alternatives even when not commuting looking only at the cost-efficiency of a route at a given hour does not create a strong transit network. I believe we agree with that sentiment and I used a sloppy example to make the point, but I was trying to make my post digestible.

  7. This is not rocket science. Denser is better.

    As for all those taxes coming from King County, well, without Seattle that real estate in the county would be a lot less pricey.

  8. Can anyone name a single other service of local government where the benefits are distributed according to where its tax revenues come from????? Imagine if we decided that public safety or public health or criminal justice services were distributed in such manner. No; this whole 40/40/20 thing is a travesty, a road we don’t want to go down for public services in the future

    1. Sound Transit does have subareas similar to Metro and doesn’t allow the money cross subarea boundaries. You make a good point, though. Is the ST model better than Metro’s? It’s up for debate.

      I personally think it’s fine that Seattle is subsidized by King County — and probably better for the region and congestion. I was just correcting some other bloggers who were claiming the opposite.

      And of course, Seattle subsidizing King County is the same argument you and other are making just flipped around.

  9. Great discussion everyone. Running a quick calculation, I’d say that John is right from the tax side. But what astounds me is that we’re running buses to the east side with single digit on-peak fare recovery. If the issue is that Seattle isn’t paying enough taxes, why don’t we up Seattle’s taxes? Upping fares will drop ridership, which I consider a bad thing.

    Actually, I wouldn’t mind Seattle separating themselves from the county when it comes to buses. In-city transit is a completely different beast than suburban commuting buses, and the taxes and fares should reflect this.

    1. I don’t actually feel Seattle isn’t paying its fair share — which I’m sure this blog post sounded like. I just don’t feel the other case is true, so King County is, in my opinion, paying its fair share.

      The fares being raised doesn’t have much to do with subsidy or Seattle vs. the rest of King. There’s just not enough revenue to fund current bus service, and raising fares doesn’t actually fix the problem. So we’re probably talking future cuts in service, new taxing authority for KC Metro, support from the state, massive delays to RapidRide, a complete halt on optional capital projects (like bus shelters or new overhead wires), and (the component we’re talking about) fare increases.

      I think raising fares outside of Seattle just wouldn’t generate enough revenue. And it brings up fairness questions since they do pay more taxes, as this thread has illustrated. Finally, we’d have to educate riders and operators around the county about a new fare structure.

      One thing I advocate along the lines of what you suggest, is making a two-zone off-peak fare that’s higher than the one-zone off-peak. Right now one- and two-zone offpeak routes are the same fare.

      Raising taxes is not an option without changing state law, which I have heard is being pursued. Cutting service isn’t on the table yet, but once it is I doubt we can get to safe pastured just by cutting the obvious and under-performing routes on the Eastside. Hopefully the cuts won’t be as political as 40-40-20, but there’s no doubt that Seattle would be hit too.

      In terms of a Seattle-only bus system… I guess there’s always a reason to question the status quo, but you can imagine the start-up costs would be tremendous and this wouldn’t really be on the table for many years. I don’t think anyone is anxious to start a new governance structure under falling tax receipts and erratic diesel prices — not to mention a multiple year backlog of bus orders.

      I have a hard time getting too passionate about fare increases for two reasons. First and selfishly, I have an employer provided bus pass. Second, I am hearing from all over the place that RapidRide is completely un-doable. Metro completely failing to deliver a major investment that it promised to voters is a lot more troubling to me than a fare increase that almost every other major transit system has had to suffer through.

  10. Not to belabor the point, but I want to get the numbers right for the future.

    2007 tax receipts for Metro total: $427,579,378.18
    2007 fare revenue for Metro total: $85.4m
    Metro total: ~$513m

    2007 tax receipts for West Subarea: $160,724,889.57
    2007 fare revenue for West Subarea: $55.6M
    West Subarea total: ~$216m

    (per http://dor.wa.gov/docs/reports/2007/ltd2007/Table3-2007.pdf and http://dor.wa.gov/docs/reports/Local_Retail_Sales/allcy07.pdf)

    West Subarea / Metro revenue: 42.2%

    Total Metro service hours: 2,194,542
    West Subarea service hours: 1,273,461

    (per http://transit.metrokc.gov/am/reports/2007/2007-RtPerf-PeerComp.pdf)

    West Subarea / Metro service: 58.0%

    Note: The revenue figures apparently include capital programs while the service figures do not. I do not know where the capital programs are focused on, or where to get information on that number. It is probably public.

    Multimodal man and Matt, do these numbers look right?

    1. The west tax receipts look a little low. Seattle itself looks like it raised $153M in tax receipts – the rest of the west area only raised $7M? Maybe the west area is smaller than I’d imagined.

      Other than that it looks good.

      1. I think the rest of the West subarea is just Shoreline and Lake Forest Park. I don’t think there’s any unincorporated KC up there.

        Double checking the math from http://dor.wa.gov/docs/reports/Local_Retail_Sales/allcy07.pdf:

        Shoreline: 761,015,623
        Lake Forest Park: 66,793,186

        Total sales: 827,808,809
        * 0.009 transit tax = 7,450,279.28 = ~$7.5m

        Which is a much smaller contribution than Seattle’s $153m, yeah.

  11. You can make the numbers say anything you want to. Why stop with subareas? Does Redmond pay its “fare share”? How about the U-District, or Capitol Hill? If you go by residents, downtown is clearly subsidized. If you go by employers, downtown is clearly subsidizing. How about UPASS or employer discount revenue?

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