Metro Talks About Possible Fare Increases
The transit authority staff today is presenting the Metro board with a preliminary outline of an operating budget for next year that would include a fare increase and no service cuts.
There's a long way to go: The staff won't present a formal budget for fiscal 2011 until December, and then the board will get a crack at making significant changes, as it did last year. But today's meeting provided a look at some of the issues ahead.
A fare increase, which would be the first in four years, would not close the budget shortfall if it were pegged to the rate of inflation, the staff said. The staff and board are not discussing a specific proposal at this point.
For next year, the staff is assuming conservative growth rate on bus and rail ridership of 1 percent, as well as a drop in advertising revenue. After 10 years, the current ad contract is set to expire in June and a new one is in the works, says Metro Chief Financial Officer Carol Kissal, but it's not likely to generate as much revenue as the current one.
Personnel expenses are likely to rise by 3 percent, while fringe benefit costs -- listed separately -- are likely to rise by 11.5 percent. A big change: The cost of providing transit services for disabled people is likely to rise by 25 percent, to $98.6 million. The staff thinks the program's rate of growth is "unsustainable."
In planning for the current operating budget, the transit authority first considered and then abandoned proposals for significant service cuts. Instead, it cut staff, dipped into its rainy-day fund and made some generous estimates about projected revenue.
Some of the local jurisdictions that subsidize Metro helped out to eliminate or reduce some bus service cuts in their areas, but there was no increase in the annual subsidy that the jurisdictions pay to finance the transit authority.
A subsidy increase for the 2011 fiscal year, which starts in July, is unlikely, given the state of the economy. In fact, board member Peter Benjamin of Maryland described the idea of even keeping subsidies at their current levels as "a reach" given the state of local government finances.
Board member Chris Zimmerman of Arlington, looking over the budget forecast, said that most of the items contributing to a potential budget gap appear to be beyond the immediate control of Metro. Thinking about this year's painful deliberations about choosing between fare increases and service cuts, he said it's important to ask the governments "How much Metro do you want to pay for?"
If the jurisdictions cut their subsidies, he said, it's likely to push the fare increase higher.
"We need to have that stuff on the table" in the months ahead, he said.
A riders advocacy group, MetroRiders.org, implored board members this week to urge their contributing jurisdictions to provide a "sizable increase" in the subsidy to close the impending budget gap.
The riders group also called on the board to schedule a public hearing soon after General Manager John B. Catoe Jr. offers his budget proposal in December. Normally, the board schedules hearings only after it has spent months reviewing a budget proposal. The group wants the public involved early so it can have a greater impact on the discussions.
Board member Gordon Linton of Montgomery County proposed a series of town meetings to bring these issues to the public before Catoe presents his budget in December. The board asked the staff to come back with a plan for such meetings.
See the Metro staff's Budget Guidance here.
September 10, 2009; 12:40 PM ET
Categories: Metro , Transportation Politics , transit | Tags: Dr. Gridlock, Metro fare increases, Metrobus, Metrorail
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