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Sunday, April 29, 2007

Why METRO Needs to Change its Fares (by MTA)

Why Metro Needs to Change its Fares

For decades, taxpayers in Los Angeles County have been heavily subsidizing fares for Metro bus and rail riders. The subsidies rose sharply under a federal Consent Decree when a court-appointed Special Master ordered a massive expansion of bus service. That resulted in a $1.8 billion projected operating deficit for Metro over the next 10 years. In other words, Metro doesn’t have enough money to pay for the bus and rail service on the streets today.

But the deficit doesn’t exist in a vacuum. It threatens to choke off new mobility options for 10 million county residents no matter if they walk, bike, take a bus or train, carpool or drive a car or truck. Everyone, regardless of ethnicity and income, pays the sales taxes that fund our transportation program no matter what transportation mode they use, so we all have a stake in the fare subsidy dilemma.

Los Angeles County taxpayers are not getting what they expected when they voted twice for local sales taxes intended to further modernize and expand public transit and improve streets and highways that benefit the vast majority of county residents.

Last November, voters overwhelmingly approved a nearly $20 billion state bond measure to build highway and public transit projects. Metro’s massive operating deficit is siphoning funds that could be leveraged with that bond money or other state and federal dollars to fast track critical relief on our congested highways and transit system.

This is what drove us to propose a major fare restructuring. We simply can’t continue business as usual and still provide quality service to our customers.

Although the base Metro cash fare is $1.25, the average Metro rider pays only 58 cents a boarding. This is due to deep discounts for the various pass holders. Fares cover just 24 percent of the cost of a ride; 76 percent is subsidized by taxpayers. That compares to 1988 when taxpayers subsidized 56 percent of each boarding passenger’s ride.

It’s simple economics; our revenues don’t cover our costs and if we don’t do something now, we’re just postponing the inevitable and making the problem worse for the future.

Metro has diminished its reserves, slashed more than 500 administrative positions in the past five years, reined in its workers compensation costs and aggressively pursued every avenue to raise more revenue including blanketing our buses and rail stations with ads – but it’s still not enough.
We recognize higher fares will be difficult for our transit customers. It’s the last thing we want but we have forestalled acting for far too long. At this point if we don’t do the fare change, it will be much worse for our patrons because cuts in service will be more painful, inconveniencing many and leaving some riders stranded.

If the Metro Board adopts the proposed fare changes, the average passenger fare will still be only 86 cents per ride, much lower than what passengers pay in other comparable markets. A daily pass costs $9 in Boston, $8 in Atlanta and $7 in New York City, and many carriers already charge $2 base fares. A gallon of gas now costs about four times what Metro riders will pay, so Metro will continue to be a mobility bargain.

Despite rising costs for new equipment, fuel, labor, and other operating expenses, Metro has maintained one of the lowest fare structures in the United States even as we undertook the greatest expansion of service in our history. Over the past decade, under a federal court Consent Decree, Metro purchased more than 2,000 new clean air buses and added more than 1 million annual bus revenue service hours.

Metro ridership in 2006 rose almost 6 percent over the previous year, double the national average. It’s unfortunate that at a time of such high transit demand for our services, Metro will not be in a position to continue serving that demand without additional revenue. We’re faced with the difficult but very real choice between charging higher fares or providing less service.

History tells us that customers are willing to pay more as long as the quality and level of service remains high. The fare change is this agency’s commitment to deliver the service our patrons have come to rely upon.

It’s our responsibility to provide the greatest level of service we can to our customers while operating within our means. That’s the only way we can fulfill Metro’s commitment to our patrons and taxpayers.



Blogger J.C. "Fanz23" Lewis, Jr said:

I agree that the MTA needs to raise its fares to be able operate. However, we all know any fare change will be protested and the management will be called "racist." Let's not forget who rides these buses, illegals and poor black and whites...cmon! Metro and the Citizens of the County of Los Angeles will subsidize the cost in lieu of taxes..

May 02, 2007 3:43 PM  

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