One of the serious limits to fare increases is the impact on low-income people. Indeed, the current system for selling bus tickets to social service agencies will inevitably miss needy portions of the population. If the ticket program were ever radically expanded you’d almost certainly see a secondary market develop, as tickets are about as traceable as cash.
As a poverty-fighting measure, however, low Metro fares are a blunt instrument. First of all, they threaten the service that low-income people depend on. Secondly, a significant portion of the savings are recouped by middle-class commuters, employers (through transit subsidies), and the federal government (passes bought through employers are usually done pre-tax). More after the jump.
However, ORCA provides an opportunity to re-think this framework. In practice, you can’t sell a charged ORCA card to strangers on the street. Recipients would have to report the old card lost or stolen to receive a new one, strictly limiting the circulation of these cards to one per recipient. In principle it should be a relatively lightweight bureaucratic process to offer people already receiving public assistance (e.g., food stamps) if they would also like a discounted pass on an ORCA card.
Each 25 cent increase in fares brings in about $12m annually. 75 cents (on top of the increase planned for 2011) would more or less solve Metro’s revenue problem.* I haven’t done the research to know what the market will bear, but it’s clear that any additional fare increase will solve a big chunk of the problem.
To protect the poorest among us, the 150,000 King county residents living below the poverty line could have their fares frozen at 2011 levels through an ORCA discount program. To the extent these people would purchase full-price passes, this is foregone revenue, but aside from that there is no direct cost to Metro. Metro could even eliminate the $1.3m paper loss associated with the current discount ticket system. As a fringe benefit, more ORCA cards in circulation result in faster boarding.
Dedicated opponents to this idea will no doubt find the corner cases where a poor person ends up losing a big bite of their income under this plan. While those cases undoubtedly exist, they must be measured against the very regressive impact of losing transit service altogether. While direct tax subsidy is a good way to avoid both problems, no clear path to reconciling that with Metro’s costs exists. In the meantime, in ORCA we have a means of better targeting benefits and reducing fraud.
* There’s a lot to say about the structure of future fare increases, which we’ll save for later.