Council to deliberate fare increase on July 26

Posted In: Transportation
Date: 7/17/2017

After receiving thousands of comments and completed surveys, the Metropolitan Council will formally consider raising regional transit fares in late July.

The topic is currently slated for a vote at the Transportation Committee meeting July 24 and the full Council meeting July 26. An additional discussion is set for the Committee of the Whole meeting on July 19.

Council members met for a special Committee of the Whole meeting July 12 to review the highlights of the public comment process, as well as how fare increase options fit into the Council’s financial outlook following the 2017 legislative session.

Long-term structural deficit needs to be addressed

Passengers boarding bus. Fares for regular-route bus and rail service would go up either 25 or 50 cents under a proposal being considered by the Council. State law requires the Council to set fares for all regional transit services

At the meeting, Chief Financial Officer Mary Bogie told Council members that despite the short-term budget fix for the next two years, the Council’s transit budget still faces a long-term structural deficit of about $84 million beginning in 2021. A potential fare increase, service and administrative actions, and a small surplus will help mitigate that deficit, but ultimately the Council needs additional revenue to support the regional transit system.

“The Legislature provided some one-time funding to solve our gap for 2018-19, but did nothing to address our structural deficit,” Bogie said.

Public concerned about impact on riders with low incomes

More than 6,000 participants offered guidance to the Council during the 10-week public comment process from April to June. That included more than 4,400 emails, letters, and postcards and 1,600 online surveys of transit users. Most commenters opposed a fare increase.

The Council began the public engagement process prior to the conclusion of the legislative session. At the time, there was still the possibility of both a transit fare increase and reduced service throughout the system. Commenters noted their support for investing in transit and maintaining or improving the levels of service. Many indicated they would only support a fare increase if it meant maintaining service levels.

Other themes that emerged from the comments:

  • Passengers boarding Transit Link vehicle. Base fares for Transit Link (dial-a-ride service for areas of the region not served by fixed-route transit)  would increase either $1.25 or $1.50 for off-peak fares and $2.25 or $2.75 for peak fares if the Council approves a fare increase.

    People who identified as low income said they would struggle to pay for transit with higher fares. Many noted they would take fewer trips or go fewer places because of any increase.

  • Many riders said they could personally afford an increase, but they worried about low-income populations.

  • Though some riders said they could afford an increase, they also noted they would choose other options when possible, including driving, biking, and walking.

  • Commenters opposed an increase because it would reduce ridership and that would diminish the value of our transit system in terms of operational efficiency, congestion relief, and environmental benefits.

  • A small percentage indicated support for a 25-cent increase to regular-route fares.

Support for making reduced fares for low-income riders permanent

Commenters also overwhelming supported making a program providing reduced fares for low-income riders permanent, as a way to mitigate the impacts of a fare increase. The Transit Assistance Program (TAP), which provided a $1 fare for qualifying low-income riders, was previously tested with low-income populations, resulting in better support for existing riders and encouraging hundreds of new riders.

Council members expressed support for assisting low-income riders, but questioned whether the TAP program goes far enough to help the riders that would be affected by an increase.
 
Several organizations also weighed in during the comment period, with both opposition and support for a 25-cent increase to regular-route transit fares. There was no support indicated for a 50-cent increase to regular-route fares.

Increase would help farebox recovery meet Council standard

In addition to the budget considerations, Council staff noted that the Council is capturing a lower percentage of revenue through transit fares than it has historically, and that rate has fallen below the Council’s operating policy of 28.5%.

Council members expressed a desire to discuss this policy further in the future, and establish a framework for making fare-related decisions in the future.

“What number is appropriate? We should be having that discussion in the context of the larger transit world,” said Council Member Wendy Wulff.

Particularly given the budget situation in future years, an increase now may still be followed by another fare increase soon.

“I don’t think we’re going far enough,” said Council Member Harry Melander. “We’re also going to have to have these incremental increases as time goes on to provide the service that we have. Are we really addressing the problem down the road?”

‘Our financial responsibility to the region’

Council members are also concerned about not having additional revenues to reinvest in the bus system. And despite future uncertainty, several Council members advocated for a vote now, rather than delaying the decision further.

 “I think the case is pretty clear – I don’t have a lot of enthusiasm for it,” said Council Member Katie Rodriguez, chair of the Transportation Committee. “If we look at not having a fare increase now, then it gives us less revenue to improve that service. I think it’s our financial responsibility to the region.”

A 25-cent increase in regular-route transit fares will provide an additional $6.7 million in revenues during the first 12 months, but result in the loss of an estimated 3.8 million riders. A 50-cent increase in Metro Mobility fares would raise $1.3 million in additional revenue during the first year. Adjustments to Transit Link fares, including closer alignment with the Metro Mobility service fares, would result in $256,000 in additional revenue the first year.

Other policy changes are also up for discussion, including pass program pricing and use of reduced fares for qualifying passengers.

Transit fares were most recently raised in October 2008. State law requires that fares are set for all regional transit services by the Metropolitan Council. A vote is planned for the July 24 Transportation Committee meeting and the July 26 Council meeting.

 
 

Posted In: Transportation

Tags: fares

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