[Speed Gibson,
Thursday June 19, 2008 at 11:43pm]
A "Fare" Tax?
Metro Transit is seeking a fare increase this Fall, effective October 1. They're forecasting a $15 million shortfall next year despite a recent surge in ridership. Fuel costs are going up and the dedicated funding from motor vehicle sales taxes is significantly below projections.
This seems reasonable at first. We've seen the price of gas go up sharply, painfully, and we know diesel fuel is going up at least as fast. Metro Transit used 7.5 million gallons last year, and fuel will cost about $4.5 million more this year.
But look closer and you'll find that the real reason for the deficit and the fare increase may really be - Light Rail.
It's hard to get recent operating loss figures for the Hiawatha Line but maybe I can get some at the public hearings scheduled in July (see link above). Supposedly it's around $20 million a year, millions more than the total deficit, meaning that the buses themselves are in the (subsidized) black.
Also, it seems odd that increased ridership should drive metro transit further into the (subsidized) red. Almost all of its costs are fixed, fuel prices being the obvious exception. If as it appears to me fares cover 25 percent of the costs and fuel even now is maybe 10 percent of the cost, increased ridership should be good, i.e., reduce the deficit further.
In other words, with the MVET Light Rail slush fund coming up short, the bus riders must pay a "fare" tax to make up the difference.
Developing ...
This seems reasonable at first. We've seen the price of gas go up sharply, painfully, and we know diesel fuel is going up at least as fast. Metro Transit used 7.5 million gallons last year, and fuel will cost about $4.5 million more this year.
But look closer and you'll find that the real reason for the deficit and the fare increase may really be - Light Rail.
It's hard to get recent operating loss figures for the Hiawatha Line but maybe I can get some at the public hearings scheduled in July (see link above). Supposedly it's around $20 million a year, millions more than the total deficit, meaning that the buses themselves are in the (subsidized) black.
Also, it seems odd that increased ridership should drive metro transit further into the (subsidized) red. Almost all of its costs are fixed, fuel prices being the obvious exception. If as it appears to me fares cover 25 percent of the costs and fuel even now is maybe 10 percent of the cost, increased ridership should be good, i.e., reduce the deficit further.
In other words, with the MVET Light Rail slush fund coming up short, the bus riders must pay a "fare" tax to make up the difference.
Developing ...