In this Press Release, Metro has said that the recession has made Metro’s Finances much worse than originally projected, and service could by cut by as much as 20%. This is an out-right disaster:

The national recession continues to erode King County Metro Transit’s main funding source with new sales tax projections showing an unprecedented $100 million funding gap for 2010, and a worsening of the current 2008/09 biennial sales tax receipts by another $29 million. The revenue shortfall from 2008 budget projections could mean service cuts of 800 thousand to a million service hours annually.

The new sales tax figures pose one of the most serious financial emergencies in the transit system’s 36-year history. Budget managers warn that sales tax revenues could continue to decline through June 2010. Even if the economy rebounds it would take more than a decade to build service back to current levels if service is cut.

“People are riding the bus in record numbers, yet the very service they want and need is jeopardized by the continued drop in sales taxes,” King County Executive Ron Sims said. “We’ve already cut costs by $80 million in capital, and operating costs by more than $2 million in order to keep service on the roads this year.“

Wow. Unfortunately, the stimulus package included no aid to transit agencies, and with falling ever falling sales-tax revenues, there’s little hope of finding more money. This is about the worst thing a transit advocate can read:

In 2007 voters approved the Transit Now Initiative that funded a nearly 20 percent increase in service through 2017. However, the worsening sales tax picture means $100 million less than what was projected when Transit Now passed.

That projected shortfall funds between 800,000 and one million annual hours of bus service or about 20 percent of the 3.5 million annual hours of transit service Metro operates today. That means more than 75,000 daily bus passenger trips would be eliminated.

Metro’s ridership was up 7% in 2008 compared to 2007, but already in 2009, 20% of service will have to be cut. I’ve known for a while that there would be little or no net increase in service hours from Transit Now, the .1% sales tax increase for Metro the voters passed in 2006, but I had hoped that it at least service could be maintained. I guess not. I’m sure we’ll hear more about what routes will get cut soon.

28 Replies to “Metro Service to be Cut 20%?”

  1. Typical “sky is falling” press release. Clearly they have some issues – hopefully this is part of a plan to get some movement on alternative funding sources.

      1. Does MVET funding come from people who do not use public transit (car owners)? I am not sure how that makes sense.

        How about raising rates? Or cutting spending elsewhere.

      2. I am not sure I follow… Why do you advocate price controls?

        People will switch to public transit. Switching should help mass-transit’s finances. MVET seems to do the opposite. That funding structure is like a fitness center. It works best when no one uses the mass-transit they pay for. This is a recipe for anger.

        Imagine if NYC tried funding their subways with a MVET on Manhattan residents.

    1. I am sure that trying to get the MVET is a part of it. But the finacial troubles are real. The situation was dire back in the summer before the financial crisis, not it’s desperate.

    1. No, definitely not.

      Obviously this press release is in part intended to put pressure on Olympia and Washington, DC to help. Olypmia needs to give Metro the right to raise the MVET, possibly voter approved — hopefully just approved by the council so we can get relief ASAP. Oly should also allow transit districts have other sources of revenue: payroll taxes, property taxes, etc.

      Washington, DC needs to directly support fledgling public transit agencies. With just a few billion spread across the country, we can keep transit agencies from making drastic cuts, like the one KC Metro is facing.

      This is a real shame. I didn’t expect to hear about 20% cuts.

      1. The line to the federal cash well is long, with Chrysler and GM just getting back in line for yet another bailout. Olympia definitely needs to allow agencies to find other taxes.

        I think the MVET is wildly unpopular, but a payroll tax might not go over so badly with voters.

      2. I wouldn’t vote for it. I’d tell them to cut the salaries of the $35-40 dollar per hour supervisors, $75,000- $100,000 dollar a year administrators, $19-27 an hour bus drivers, etc first before voting for more taxes. Some of these people are making more an hour than private sector employees. The fat needs to be cut first.

        I’m not saying everyone needs to be reduced to min wage jobs or anything like that, but at least make some cuts. If I hear out of Metro that salaries of top officials are being cut and some wages are being reduced and jobs are being eliminated, than and only than will I approve and vote for another revenue source. Until than, I will refuse to believe that everything and anything is being done to reduce costs first before cutting service. Something has to give.

      3. Brian,

        Calling for pay cuts makes sense in the abstract, but of course Metro pay and benefits are collectively bargained. It’s certainly a defensible position that public sector unions work almost entirely against the public interest, but nevertheless they’re an obstacle that can’t simply be overcome by fiat.

        Furthermore $75-100k for an administrator is not an outrageous salary with someone holding significant managerial responsibility. We all have our issues with Metro management but cutting their salaries doesn’t appear to be self-evident way to address those problems and attract better personnel.

      4. At this point, its not about attracting better personnel. In fact they shouldn’t even be hiring personnel at this point if they have such a cash crunch. Its about the survivability of the agency along with showing the taxpayers who foot the bill that they are taking all steps necessary to cut costs without cutting service(which is also going to have to happen).

        Management and administration need to put their money where their mouth is by cutting their own pay first before asking the taxpayers for more money. The good times are over, everyone needs to sacrifice. The wages and benefits that are promised are not sustainable in the current economic climate.

        Taxpayer revolts happen when the perception is that government employees are getting paid much more than their counterparts in the private sector at all levels. Throw in a severe recession/depression and Metro is not going to get much sympathy with those sorts of wage levels when the average person in the street is worrying about losing their job.

      5. Brian,
        Cutting pay or benefits of anyone covered by a union contract will be difficult at best. The unions might agree to some givebacks with the rather dire financial position of Metro, but they aren’t going to agree to the poverty wages or near-zero benefits many private non-union bus operators have for their employees.

        As for salaried positions, many of those jobs pay the same or below what similar positions with similar levels of responsibility pay in the public or private sectors.

    1. I’m shocked, too. I had fully expected an announcement that there would be no money for rapid ride or something like that, but I hadn’t honestly expected 20% cuts.

  2. There is no doubt that the current situation is dire and unprecedented (at least in modern times), but at the same time it seems like Sims has really been mismanaging the crisis. I have a couple of observations and one question:

    1) He has certainly made the situation worse by deciding to phase in the currently planned fare increase in two steps. Delaying full implementation when he knew it was needed just made the budget hole larger. I call this a general lack of leadership.

    2) He hasn’t proposed anything that could be called a real solution. His approach seems to be to attempt to buy time and hope that the State or Feds solve his problems for him in the form of new revenue sources or stimulus funding for operations.

    3) Put a fork in Transit Now. He sold this to the voters as a service increase along the lines of BRT-Lite, now the money is just going to go to Metro operations. Say “bye bye” to Transit Now.

    And finally a general question: If new transit service is allocated following the 20/40/40 with Seattle only getting 20% of new bus service, does that imply that bus service cuts will also be allocated following the 20/40/40 rule with Seattle taking only 20% of the cuts? Somehow I doubt it, but it does have a certain fairness to it.

    1. It would make more sense to cut from some of the mostly-empty 40/40 buses. Seattle buses move a whole lot of people in each service hour.

  3. Does anyone else remember that when Metro first adopted sales tax as a funding mechanism in the wake of I-695, it noted that it was an unstable revenue stream AND that Metro may need to “bank” surplus in good times and spend those saving during economic downturns? Clearly this was not done – just how many times has metro either returned to the voters for more funding or raised fares since 1999? We have allowed ourselves as customers to simply become used to this pattern of Metro facing a total disaster every two years – except now they have it down to every single year.
    I think it is time to have an open discussion about how Metro may be replaced by a better agency with a better funding mechanism. Folding Metro into the King County government in the early 90’s was clearly a mistake and it seems to me obvious that King county simply cannot manage this agency.

  4. In fairness to Metro they did get a one-two punch of record gas prices followed by a crash in sales tax revenue. Expecting them to get through either on their reserves seems reasonable – the expectation that they could get through both seems unrealistic.

    I remain critical of Ron Sims. He’s turned into a one-person leadership vacuum. My frustration with the press release is that it’s all problem and no solution – meaning no leadership whatsoever.

    1. Yes, I agree with this post, but then this is unfortunately how the Seattle Times is selling its newspapers these days – a constant stream and diet of doom-laden items which makes me want to jump into Lake Washington and not rise again.

      The latest news from Metro is indeed disastrous. I don’t think that cutting salaries as an earlier post said is really a solution. I-695 screwed Metro back in 1999 and as with anything related to the sales tax as a revenue source, the potential to be constantly screwed is always there. Someone on NPR earlier today called this the worst downfall in centuries which would bring us back to before the industrial revolution!

      I think as a community, we are going to have to come together and offer some volunteer solutions.

      I hate to say this, but unless we can get more demand into the economy and consumer confidence rising to the point where we all feel like buying stuff again, then Metro’s problems and even the future of ST2 are in jeopardy. We can – and I most certainly do – blame Eyman, but we have to come together as a community to say what we can live with and what we cannot. A 20% cut in Metro service is defintely not something we can live with but instead of that, what and more importantly how?

      The fact that every governing entity other than the federal government has to live within its means is also a huge problem and one which pulls against the desires of the President to create and/or preserve jobs with the recently signed stimulus package.

      Tim

  5. A few thoughts:

    I’m willing to swallow a large fare increase in order to avoid massive service cutbacks.

    Metro really needs to look over every aspect of its operations and come up with ways of cutting costs without cutting service or necessary maintenance. For example maybe they could outsource emptying trash and cleaning bus shelters to someone? Another area to look at is back-office operations. If IT, accounting, HR, etc isn’t yet integrated with King County why not?

    Metro also needs to look at every possible way to increase revenue without raising fares. Sell more ads for one. Perhaps use bus shelters and benches as billboards? Perhaps someone would even be willing to maintain the shelters as part of the deal? For an agency Metro’s size their revenue from advertising is pathetic.

    Another question is why Metro’s farebox recovery is so low. Have fares been kept too low? Is Metro running too many unproductive routes? Is Metro allowing too much fare evasion?

    When it comes to cutting service the first routes/service periods that should be cut are the least productive. Ridership, incremental cost, and farebox recovery all need to be looked at on a run-by-run and route-by-route basis.

    Another opportunity for cutting service are routes that might be better run by Sound Transit though this requires an agreement for Sound Transit to take over the service first. Another opportunity would be to cut routes that largely duplicate ST service. For example the 306 and 312 largely duplicate ST service on the 522.

  6. Play realpolitick. Cut commuter service to major employers everywhere. Fill city streets and state highways with more SOVs. Make life miserable for everyone and see who buckles first.

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