Transit Sales TaxAs promised last month, here is the July 2013 Economic and Revenue Forecast from the Office of Economic and Financial Analysis.  I am NOT an economist but it appears the news is quite good.  2013, 14, 15, and 16 Transit Sales Tax estimates have been revised upwards.  If I have done my math correctly that comes out to about $7.9m additional revenues in 2014, $6.0m in 2015 and $7.6m in 2016 (I don’t know how to estimate this year’s additional income).  Certainly not enough to cover Metro’s $60m a year shortfall, but it does mean there is the potential for a little less bone cutting.  Assuming of course I did my math correctly.

I’ve attached my spreadsheet.  The numbers come from slide 28 (Transit Sales Tax Forecast) of the March Forecast and slide 29 (Transit Sales Tax Forecast) of the July Forecast.

28 Replies to “KC Revenue Forecast Released – Good News for Metro”

  1. Does the amount of total service saved amount to 60,000 service hours, like Pierce Transit?

    1. Probably a little bit more. I’d hazard a wild guess that this would be enough to back out maybe 80,000 hours of the 600,000 hour cut.

  2. This is a little bit of good news but the overall goal remains the same: no bus cuts, ever. There is a big rally tomorrow at noon by the King County Courthouse to demand Olympia deliver the revenues we need to get more and better transit. I hope everyone will be there.

    1. No, you cannot say that no matter how empty a bus route is, it is never ok to take its resources and use it to improve service on other routes. Pruning bad routes is a natural part of any bus system.

      Regardless of how much money you have, you have to be willing to shuffle resources around to make the best use of it. To say that just because a route exists today, that you can never cut it, is unfair to everyone else who might get better use out of those service hours.

    1. This may be the only initiative to the people worth its salt ever. Where do I sign on?

      1. +1

        While I kind of agree with Tim Eyman that this measure is a little bit goulish, he has done so much to hurt this state that I think that it’s almost fair.

  3. I’m not very happy with the way that this issue is being framed. Metro’s list of cuts includes buses that need to be cut if we are ever to see an efficient network alongside cuts that are genuinely harmful. It’s really difficult for a layperson to judge how much of these are the former, and how many the latter.

    Moreover, what we are seeing is a plea for no strings attached money to save these service hours. What happens if Metro gets the money? Will it ever be able to cut the problem routes. I can just see the uproar: “But you promised that if you got the money, my bus wouldn’t go away. That’s the only reason anyone ever agreed to this…”

    Usually a shortfall like this would be seen as an opportunity to cut costs and/or raise prices. Given that we have some of the highest paid bus drivers in the nation, with several making nearly six figure incomes, why haven’t we heard about reducing labor costs? Ideally of course, this would take place through collective bargaining, and would involve relaxation of inefficient work rules. Why is Metro even talking about expanding its reduced fare program: it’s focus needs to be on making it as small as is politically and legally possible? Why is there no discussion of trimming management?

    1. I agree with you point that we should really use these as a way to ditch bad routes your point on drivers is a bit off base. The drivers work quite a deal of overtime because it would be too expensive to hire and fire with the unstable funding sources we have available for transit. I thought I remembered there being an article on this some time ago but I’m on my phone so I can’t search for it effectively.

      1. As long as there is a single Part Time driver who wants more hours then there is no need whatsoever for a Full Time driver to be getting overtime. Not only is it a waste of resources but you’re starving the thin to make the fat fatter. I think that is what William means by “relaxation of inefficient work rules.”

        Not only would this save a SIGNIFICANT chunk of revenue but it is just the right thing to do. Talking about Seattle Values, how is the current system fair at all?

      2. It’s called feathering the nest. Full time drivers pick a retirement date, then work an unconscionable amount of overtime to artificially raise their average pay over that period. Retirement is based on the highest five year average for nearly all drivers now.
        Not only does the system get whacked by senior drivers making time and a half, but the retirement system gets screwed by higher payouts for years to come.
        The tax payer ends up with a big fat bill for all the gaming going on. Ask Detroit how the last act plays out.
        Meanwhile, lots of drivers barely earn above the poverty level. Go figure.

    2. Metro will be raising fares for the fifth time in a little over five years next year. At some point, these fare increases become a barrier to accessing transit, and as a result, a likely Title VI violation. Without some sort of low-income discount, Metro is about at the end of how much it can charge in fares.

    3. Raising fares: Metro’s fare increases have already outstripped increases in the CPI (or even the chained CPI most armchair economists now seem to favor). They’ve raised fares a lot, but that’s not even the point. Fares don’t pay for most of Metro’s budget. Fares exist as a sop to the political reality that if we had “free” (at the point of ride, but still paid for the same way that roads are paid for: gasoline, property, sales, and registration taxes) buses, the hue and cry would be so fierce and reflexive that Metro would cease to exist. Raising fares accomplishes two things; it prices poor riders out of the service entirely (something that Metro is theoretically trying to abate with the Low Income Fair Study Group or whatever it’s called) and it makes people who have an option–you know, the 95% of us who ride Metro and still have a car–question the fiscal reality of taking the bus and, thus, putting more strain on the existing road system.

      Cutting poor routes: I will say, right now and upfront, that I agree that some routes are nuts. 61 doesn’t seem to accomplish much and wanders all over the map. Why do we need a 268 when there’s a 545? Or a 232 beyond Redmond Transit Center when there’s B Line? What are your suggestions? As a small, political, constraint on cutting, all of western King County pays the taxes for bus service so leaving areas without service means that people are paying for something they’re not receiving or even receiving the chance to have.

      1. But some routes do a _much_ better job of covering their costs than others. I bet that some of the stronger Seattle routes comfortably cover their operating costs. Even the 212 — a peak hour express — probably covers its costs at the fare box [although, admittedly this depends on it not having to pay for the Eastgate P&R]. Other buses, the 204 comes to mind, do not.

        Precisely what does a bus transporting a somewhat impure 4-1 Nitrogen-Oxygen mixture do to help with congestion, or anything else for matter? The driver would be better employed digging holes and filling them in again: at least he wouldn’t be adding impurities to that 4-1 mixture outside of his bus.

        The point is, Metro _knows_ which routes are which. Perhaps we can’t just cut the worst performing hours blindly—they serve some vital political purpose, fill some social need, or fill a bona fide transit need—but that should be the baseline. The great thing about cuts on these routes is that they give the greatest gain per cut hour [because they are the most expensive hours] but also because these cuts impose the least pain [because almost no one is actually using the hours anyway].

        In addition, I think that some of the arguments against a blind fiscally based cut are dubious at best. On the political front, I don’t think we should underestimate the ability of people to generalize the empty bus they see crawling through their neighborhood to all buses. This generalization does the transit cause tremendous harm. On the social front, it’s difficult to see what social need a bus that no one uses is serving. Moreover, if indeed there is a real welfare benefit, I’d like to see it paid for out of the welfare budget rather than the transportation budget.

      2. The problem is, even so-called coverage routes are usually not completely empty, so where do you draw the line. Is an average load of 7 people enough (about the threshold where CO2 emissions of the bus become less than that of each person on the bus driving a separate car). Is 10 people enough?

        IMHO, a good threshold for coverage services is that when the cost per rider starts to approach the cost of a taxi for however long the typical trip on that bus is, it’s time to start seriously thinking about cut the route (or at least the portions of the schedule where the cost per rider is this high).

      3. The last data I saw showed two types of routes that covered their costs at the fare box: a few suburban expresses with short travel time and extremely high ridership (212, 301) and a few city routes with short travel time and high average loads (1, 3S, 13). But expecting transit generally to cover its costs at the fare box is silly. It’s a piece of urban infrastructure, just like plenty of other infrastructure that we subsidize, and necessary to have a functioning city.

        I think your threshold is a good one. I would also emphasize that it should be applied to average cost per rider for a whole route, not for individual trips. Any route with a truly good span of service is going to have a few individual trips that aren’t very cost-effective, but those are necessary to make the network usable for people without cars.

      4. Lakecityrider the 232 goes thru the Redmond transit center and out to Duvall. The B line does not go out that way.

      5. But expecting transit generally to cover its costs at the fare box is silly. It’s a piece of urban infrastructure, just like plenty of other infrastructure that we subsidize, and necessary to have a functioning city.

        It’s possible to imagine a world where transit covers its costs. Before WWII, that was the world we lived in. It’s just that, in today’s world, driving is massively subsidized by taxpayers, which makes every other form of transportation (buses, trains, airplanes, walking, biking) seem less cost-efficient than it actually is. (Of course, I understand that things aren’t going to change any time soon.)

      6. @asdf:

        I’d be a little careful about using taxi fares as a metric for cutting fares. They are artificially inflated by government enforced rent seeking.

    4. Metro has said that, of the 600,000 hours that need to be reduced, there are 490,000 hours spent on routes that have a high potential for reduction — i.e. routes that are in the bottom 25% of all routes according to some productivity measure. However, that doesn’t take into account socioeconomic and geographical equity (some degree of which Metro is required by law to maintain), so in practice, it’s unlikely that the full 490,000 hours would be cuttable. We won’t know for sure until we see the first complete proposal.

      1. Of the routes in the bottom 25%, not all are poor performers by any measure. The Seattle core routes have been so optimized that most of the bottom 25% actually have decent ridership — there are only a few that are really terrible, which account for an insignificant number of hours (22, 25, 61). What’s more, some of the bottom 25% routes outside the core could easily become more productive with better service patterns or more frequency. My guess is that there are no more than about 200,000 service hours that genuinely deserve cutting. And the thing is, there are other places where those hours are desperately needed.

      2. Calling anything about Seattle routes “optimized” runs counter to the experience of everyone who has ever tried to use the system spontaneously. You could get yourself into a world of trouble by tossing around that word.

        Of course, I know you know this, because you’re working on a grand — and likely solid — restructure proposal.

        What you keep missing about the current political context, though, is that your 1:1 service hours proposal has already been rejected. The current choice, as posited politically by the agency itself, is: cuts+restructure; or no cuts+no changes.

        That’s an awful choice, but it’s clear which of those options allows for an eventual re-expansion towards the reinvigorated system that both you and I would like to see.

        Spending/demanding bucketloads more to encase our current network in amber is the worst of all outcomes.

      3. In the 2012 performance report, Metro identifies 100,000-170,000 service hours that could be reduced from services with a high potential for major reduction, and a further 130,000-200,000 service hours that could be reduced from services with a medium potential for major reduction.

        I looked over the list. Many of the cuts look reasonable; some do not. However, I also noticed that many obvious restructurings are not on the list. For example, the 4N/4S are not listed on either table. The 82 and 83 are nowhere to be found. Hell, the *25* isn’t on the list.

        A while back, I made a list of all the Metro routes between 1-99 that include major deviations. Many of these deviations are defensible — and at least a handful are unavoidable without stringing new trolley wire — but each of them has a real cost in terms of service hours. Only a handful of these routes are listed on Metro’s table. And I didn’t even get to the triple-digit routes.

        Consider some of the absolute most frequent corridors in all of Metro. You have the 71/72/73, which is way more expensive to run than a single 10-minute express from downtown to Northgate would be. You have the 1/2/3/4/13. You have the D, and the 3-minute Mercer Place light. You have the 5, and its bizarre 43rd/Fremont turn. You have the 43, which has *no unique segments*, and which is timed so poorly that it reliably arrives a few minutes after the 8 and/or the 48 — even at times when all three routes are running at 30-minute frequency.

        I just don’t see how you can say that the Seattle routes are “optimized” in any way. I’m struggling to think of all-day in-city routes that I *wouldn’t* want to change in some way (and I’m not counting frequency changes). The 13 is pretty good, and the 40, and the 48S, and the 70, and the 358, and RapidRide C, but beyond that…

      4. d.p. and Aleks, you are both absolutely right to call me out on the use of the word “optimized.” It conveys much more than I intended to.

        All I meant (and nothing more) was that nearly all of the current Seattle routes have good to excellent ridership. Poor-ridership segments have been restructured or cut out of existence, with just a couple of exceptions that add up to almost no service hours.

        d.p., I’m more optimistic than you are that it’s possible to change the conversation a bit, and simultaneously more pessimistic than you that cuts will do much good. The reason Metro has backed away from major restructuring of any sort is that a few extremely loud activists (who typically would either have to make a transfer between frequent lines or have to walk an extra two blocks) have scared the County Council. I don’t think it’s hopeless to think that people wanting a better network could do a better job of exerting pressure of their own on the Council.

      5. All I meant (and nothing more) was that nearly all of the current Seattle routes have good to excellent ridership. Poor-ridership segments have been restructured or cut out of existence, with just a couple of exceptions that add up to almost no service hours.

        I guess it depends how you define “poor ridership”. I’ve frequently ridden buses during mid-day where everybody has a double seat to themselves, and there are still some extra seats. There may be a dozen people on the bus — enough to hit the break-even point with respect to carbon emissions — but there’s also a lot of extra capacity.

        In contrast, I’ve also ridden buses like the 40, which is often so jam-packed that they have to turn riders away. Obviously, that’s not a great situation. But I think it clearly demonstrates that there’s a lot of pent-up demand for routes like the 40, which follow sensible routes between several major urban centers.

        You’re absolutely right that we don’t have that many empty buses in Seattle, the way we do on the Eastside. But even so, our bottom 25% aren’t nearly as productive as our top 25%.

  4. Matt, I wonder if your revenue increase projections are a bit optimistic? It seems to assume a trend of continued growth which is not much different than the estimates the transit agencies applied going in before the most recent recession. Hence our current/future financial shortfalls.

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