This is the sixth and final installment of my series on County Executive Kurt Triplett’s plan to solve a Metro budget crisis that now amounts to $501m over four years. The plan, when finalized in September, will serve as the basis of the budget the Council actually adopts in November, to be implemented beginning with the February 2010 service change.
The installments of the series were:
- Part I: Introduction
- Part II: Transit Now, non-service-related cuts
- Part III: Tax Shifts and Financial Engineering
- Part IV: Fare Increases, Audits
- Part V: Service Suspensions
Some thoughts on this plan are below the jump.
First, I want to applaud Executive Triplett for producing the most serious plan, one that makes no rosy assumptions. By not banking any savings from the upcoming audit results, Triplett has presented us with a worst-case scenario for cuts, and saved the good news for later.
I’ve been diving deep enough into these Metro budget issues to understand all sides of the argument pretty well, enough that I don’t see an easy answer as to what the best way to direct cuts is. As a practical matter, I find Triplett’s argument that eliminating certain routes would make it very hard to restore service persuasive. He’s right that it’s an “optimistic” plan. If the State is actually going to deliver additional taxing authority, then the balanced suspensions will be the most seamless platform to quickly restore service. If no such authority is forthcoming (or the County will simply not raise taxes), then Metro might as well begin the difficult work of determining which routes comprise a less ambitious system, and therefore cut low-productivity routes.
Although the right path is murky, there are arguments on both sides that are unnecessarily hysterical. On the productivity side, people argue as if riders per service hour is the only relevant metric. Metro serves a greater set of objectives than that, and all sides should acknowledge that other arrangements of Metro priorities aren’t self-evidently idiotic or malicious.
On the other hand, those fighting for low-ridership routes (like the new 42) deploy the fallacy that an additional transfer is the same as being cut off from Metro. All significant populated areas in the County deserve transit service, but they don’t necessarily deserve a one-seat ride into Downtown Seattle or Bellevue. We must break this mentality if we’re ever to rationalize the system into one of rapid trunk lines and local feeder routes.
Triplett’s attempt to scale back Transit Now and foot ferry expansion is a smart one. It makes little sense to bring additional service online — service which is generally unproductive, and which riders have not yet learned to depend on — while other service is being suspended. However, Triplett also makes the two correct exemptions: RapidRide and Service Partnership funds. Both enable substantial matching funds, and RapidRide represents, potentially, a step-change in service that must not be deferred. I hope the County stands fast against sentiment to not only curtail RapidRide service, but also to scale back the amenities that make it more than a mere rebranding exercise.
There are two areas where I don’t think the Executive’s plan is aggressive enough in avoiding suspensions. First, fares: as we’ve argued in the past, thanks to tax incentives the Federal government bears a substantial share of any fare increase.  Commenter Bernie points out that there’s a very good case to be made for increasing the two-zone fare more steeply. The cost of serving these riders is higher, the gasoline savings to those riders is bigger, and as fares spiral upwards the relative gap between the two fares is shrinking.
The other shortcoming is taxes. The Triplett plan — largely because of a total lack of tax-increase sentiment on the Council — avoids any tax increase by transferring authority from other sources to Metro. There’s an additional 2 cents of property tax per $1000 of assessed value still on the table. I acknowledge that it’s easy for a single-issue advocate like me to push for a tax rise, and $6m a year isn’t going to eliminate all of our problems. However, many County leaders have blamed the State for not providing the County adequate funding authority, and are counting on the legislature to revisit that in the future. By not using the authority that we do have, even in the putative “recovery” years of 2012-2013, we totally undercut the County’s argument in Olympia.
A 2-cent property tax rise in 2012, combined with a third 25-cent fare increase in that year, would generate $48m to partially offset $90m in service suspensions over the next four years. It would also generate about $18m annually going forward. If Triplett’s guess is correct that about $50m will be uncovered by the audit next month, that would mean no cuts at all, while leaving a surplus to either add new service, expand low-income fare subsidies, or restore secondary services like security and stop cleaning. Even with nothing coming out of the audit, it would save tens of thousands of service hours and avoid spending cuts in the midst of a recession.
Wow-rare pic, both for the transitional transsign and the 3-bike rack.
Does anyone know the exact rule that caps our ability to tax ourselves for transit?
State Law. I’m not sure of the exact RCW sections involved but all taxing authority comes from the state.
Since Metro is part of King County in theory they might have access to additional sources of revenue a pure transit agency like Pierce Transit, Community Transit, or Sound Transit wouldn’t have. For instance placing a property tax levy for Metro operating funds on the ballot. However given all of the holes in King County’s budget and that Metro has a dedicated funding source any property tax levies are likely to address other areas like parks or social services.
So the short answer is all transit agencies really need the legislature to give them additional tax authority. MVET is the one I’ve heard discussed most though the ability to put property tax levies on the ballot would be good too. Assuming the legislature agrees to allow one or both taxes I’d like to see some portion limited to capital spending.
I was thinking about the possibility of Seattle taking over all of the electric trolleys, allowing Metro service hours to be freed up for other Seattle bus lines. This sounds backwards to have redundant agencies, but if it’s possible for Seattle to tax itself where King County can’t (other than those last two cents) then we can end up actually increasing bus service.
If Seattle had the money, which I don’t think it does, the City could transfer the maintenance cost of the overhead to SDOT. That would likely make Metro’s cost for ETB service cheaper than running diesels. It would basicly be like shared partnership service. The upside for Seattle is less point source pollution, a steady customer for City Light Power and a great deal of control over the routes.
I wouldn’t say the steadiness of the customer is that big of a deal.
Control over the routes – the ability to add more service, especially – would be fantastic.
Thanks for this series Martin. Well done it presenting the facts and explaining what it all means. I think one thing that seems to get lost is that this is a temporary fix. There’s lots to be done to get Metro closer the the national average or closer to it’s peers. That’s not going to happen before the election and the Triplett plan is the only completely flushed out plan that sees us through until then. And the beauty of it is that it leaves all the options on the table as the discussion moves forward and a clearer picture emerges.
Metro fares are already headed to $3 2-zone peak and $2.25 off peak for my 8-mile 1-zone ride to Seattle. Metro fares are higher than every other transit agency in he country including NY, Boston, Chicago, LA, SF.
It is elitist to think that everyone has an employer-issued bus pass paid with pre-tax dollars. There are still plenty of cash paying customers and with these two increases, Metro cash fares are approaching the limit of what the market will bear.
That should be 8-more 2-zone ride Seattle
Approaching? Back when I had a job it was cheaper (and far faster) to drive.
Cash Fare Rider,
Of course they’re high fares; our bus system and operating costs are far more extensive relative to population than those, not least because we don’t have trains covering the most important corridors.
No one said everyone has an employer-provided bus pass. There are people in my household that don’t have one. If you clicked through to the editorial I linked to, you’ll see that I support extending low-income programs to cushion the blow on the needy.
However, there’s a large source of untapped revenue in people who can afford it, their employers, and the federal government. If you’re interested in helping the needy, let’s help the needy, instead of maintaining a system that lavishes huge subsidies on those who are not.
If you have data on “what the market will bear” with respect to how the fare increases impact will impact ridership, I’d love to see it. As it is I’m not yet convinced that the fare increase will do more damage than the service cuts will.
Although I appreciate the free market arguments, bus service is something everyone who drives on roads benefits from. Or actually it’s something every taxpayer benefits from since it reduces the need for more roads. There are very good reasons to tax for service rather than expecting a high farebox recovery, and perhaps farebox recovery should only be used to limit demand.
This is more than a *poor people can’t afford high fares* issue. These are simple market pressures that increase the use of bus service when fares are low, decreasing demand for roads, and decrease the use of bus service when fares are high.
Of course I see you’re really looking at this as constrained by our tax realities and you see it really as increasing fares or decreasing service. But working within a broken system will give broken results. Want to tap into that wonderful business revenue stream? Change the rules so that we can tax them. Increasing fares just won’t do it (an no, I don’t have numbers to back that up – although I think it’s interesting that recent massive decrease in ridership has been blamed on the economy and not the recent increase of fares).
Matt T.E.,
I’m advocating tax increases to the maximum extent allowed by law. So then what do you do? Raise fares or cut service? It’s really that simple. Complaining that the system is broken won’t keep the buses on the roads. If and when more authority arrives, we can have the discussion on whether to buy even more service or cut fares. But until then, this is a binary choice.
In an ideal world I’d like to set Metro and ST fares at a level that maximizes ridership while still discouraging miscreants. But as Martin points out without a tax base to fund it we’re stuck either cutting service or raising fares.
Now at some point raising fares gives you diminishing returns as ridership drops. There is a price point where you maximize revenue. It would be interesting to know what those numbers are, though I suspect they are far higher than any of the proposed fare increases.
Besides raising fares or increasing taxes I think there exists a large potential to increase efficiency. Some of that may mean changing service (more transfers). Some may come from relocating service to where it is in demand rather than trying to promote demand where there isn’t enough density to warrant service. Some may come from decreasing management costs. Some might come from outsourcing certain maintenance rather than trying to keep a complete chassis off restoration shop in house. Let’s face it, Metro lags well behind other agencies it’s size and it’s not all because of empty buses on the eastside.
It will be interesting to see the results of the audit and it will be interesting to see what the candidates for County Executive (and to a lesser degree the Mayor of Seattle) make of it.
Already today, with a $2.50 ST 2-zone fare from Bellevue to Seattle, when my girlfriend and I go to Seattle in the evening or weekend, we’ll drive and park. $10 for round trip bus fares more than pays for the marginal cost of gas and parking: we already have the car and insurance, we can sometimes find free parking and certainly less than $8, and it is faster and more convenient. When the fares are high enough that we won’t use it, it reduces our inclination to support any tax increases – if the taxes aren’t going to provide cost-effective service, why bother? I don’t think that raising fares higher than the increases already planned is viable – it will drive away riders.
Cash Rider –
Your comparisons between Metro and the systems in Boston and New York (at least – those are the ones I’m more familiar with) aren’t completely accurate. Both of those systems offer express bus service that is comparable to a lot of Metro’s peak hour service but which costs a premium – $3.50-$5.00 in Boston and $5.50 in NY.
In New York City I can travel unlimited distance on the subway plus a bus transfer for about $2. Boston bus fare is $1.25 and subway is $1.70. Seattle and Eastside bus rides are comparable to this
How about changing the law? Why are we so afraid of correcting what is truly wrong? This is a huge problem in almost every aspect of our laws… Just because it made sense back then doesn’t even slightly imply that it makes sense now.
Frankly? Because if we had the political will to do it at the state level, the money would STILL be better spent speeding up rail expansion. Dumping more money into buses will just cause this problem again in the future.
Martin, I completely agree that we shouldn’t make all decision based solely on farebox recovery. And there are good reasons for running various low-performing routes — from serving transit-dependent communities, to establishing new routes, to realizing efficiencies in moving buses around and the like.
But when you’re facing serious budget issues, it simply doesn’t make sense to keep increasing fares but not cutting where service falls off. Simple common sense would suggest that the folks most likely to pay the fare increase are going to be employer-subsidized and/or higher income commuters. But if you turn around and cut express service or decrease frequency, those are also the riders most likely to switch (back) to cars.
Actually, fare increases are less likely to send people back to cars than service cuts.