Originally published Saturday, August 2, 2008 at 12:00 AM
Forget 25 cents; Metro Transit weighs higher fare hike
A planned 25-cent bus-fare increase is on hold while King County Metro Transit considers a steeper increase or service cuts because of a rapid drop in sales-tax revenue.
Seattle Times transportation reporter
A planned 25-cent bus-fare increase is on hold while King County Metro Transit considers a bigger increase or service cuts, because of a rapid drop in sales-tax revenue.
Metro had planned an Oct. 1 increase, blaming it on a spike in diesel-fuel prices. New buses were recently added to a few busy routes, but now cutbacks — unthinkable a few weeks ago — are on the table as a last resort, County Councilmember Dow Constantine, D-West Seattle, said Friday.
Another option is a new car-tab fee for transit. But car taxes are unpopular, said Constantine, chairman of the council's Transportation Committee.
The county will take six weeks to two months to study its options, said County Executive Ron Sims.
The money shortage comes as county buses attract a record 400,000 riders per weekday, a 7 percent increase from a year ago, because commuters are seeking refuge from higher gasoline prices.
Fares cover only a fifth of Metro's operating costs. Metro is funded mainly by the sales tax of 0.9 percent, or 9 cents per $10 purchase. This includes 1 cent from the Transit Now measure approved by voters in 2006.
A troubled economy means that Metro, which normally projects 5.65 percent annual growth in sales tax, actually collects less sales tax, at $33.4 million in April 2008 (the latest month available) than in April 2007, when $33.9 million came in, state records show.
Metro now predicts only 1 percent growth next year and 4 percent in 2010. All told, Metro would bring in $89 million less by the end of 2010 than once thought. Metro's biennial operating budget is $1.1 billion.
People are spending what money they have on food and fuel, Sims said — items not subject to the Metro sales tax.
Forecast worsens
Budget Director Bob Cowan said he expected a softening in sales-tax revenues, but didn't realize how bad it would be until his staff recently ran a sales-tax model specifically for transit to prepare next year's budget. Trendspotting is delayed somewhat because it takes the state two months to report sales-tax income to the counties.
Sims said he got the forecast Wednesday. "It shows a near-unprecedented drop in expected revenues. The only one we know of greater was after 9/11."
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The situation facing Metro is only one part of the county's money troubles stemming from the sales-tax shortage. A $68 million gap expected in the county's general fund next year now "looks like it will definitely be over $80 million," Cowan said Friday.
He will report to department heads and the council on the deteriorating situation Monday. In March, he asked courts, prosecutors, the Sheriff's Office and other agencies to prepare plans to trim spending 8.6 percent below current levels. The public health and human-service departments were told to plan for a one-third cut in the portions of their budgets that are supported by the general fund.
Property tax is the primary funding source for the $687 million general fund, followed by sales tax.
Promises at risk?
It's unclear whether the new sales-tax slump will threaten the county's launch of "RapidRide" bus-rapid transit service in the early 2010s, as Sims promised in the voter-approved Transit Now measure two years ago.
Metro already has used Transit Now money to buy several hybrid buses, being sprinkled onto other routes, and planned to create bus-rapid transit routes serving the Federal Way, Overlake, West Seattle, Ballard and Aurora Avenue areas.
"I don't want to tell people in West Seattle I needed to reprogram RapidRide money to pay for rising gas prices," Constantine said. "That's not a path I want to go down."
A fare increase might still happen in the next few months. Constantine said that waiting too much longer would further reduce the money to run the buses.
Staff reporter Keith Ervin contributed to this article. Mike Lindblom: 206-515-5631
Copyright © 2008 The Seattle Times Company
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