Metro's Revenue Shortfall: $704 Million in the Next Four Years

By Erica C. Barnett, Friday, August 14, 2009 at 9:28 AM
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At a Wednesday meeting of the city council transportation committee, Metro General  Kevin Desmond (above) described a nightmarish budget scenario for the transit agency: A $704 million revenue shortfall between 2009 and 2013—the equivalent of a full year of Metro operations—which, when offset by other factors (like service cuts and fare increases), amounts to a total deficit over four years of $546 million.

The reason for the huge shortfall is that Metro relies on sales taxes for between 71 and 72 percent of its budget—and sales tax revenues, Desmond noted, are “very, very volatile.” This year, for example, Metro’s sales tax revenue was projected at just under $500 million; instead, it’s coming in at less than $400 million. Metro estimates that sales taxes won’t bounce back to the projected 2009 level until after 2013—meaning that until then, riders can expect massive cuts, and after then, they can expect service at lower levels than what Metro is providing now.

“Unless there is a very, very rapid and extraordinarily steep recovery in the region, [this] probably [means] a permanent loss in our revenue” at Metro, Desmond said.

Metro plans to make up the deficit by eliminating some “complementary” and “service quality” programs—things like schedules on buses, regular cleanings, bus maintenance, and customer service. And, of course, Metro plans to cut service—”suspending” 585,000 service hours between now and 2013 under King County Executive Kurt’s plan. The fact that the hours would be suspended, not cut, is significant—suspending hours means they don’t have to be restored under “40/40/20,” which allocates most new bus hours to areas of the region outside Seattle. The plan would also defer bus purchases, reallocate some property tax revenues (a proposal I wrote about here), and increase fares by 50 cents—meaning that <strike>peak-hour </strike> two-zone bus rides would cost $3.00.

Of course, it’s far from clear that Triplett’s plan will pass—the county council, which is made up primarily of suburban representatives, is likely to balk at any plan that doesn’t preserve Metro funding in the suburbs as well as Seattle.

  • dan
    eddiew: Sure, it's nice for transit to "extend the range of pedestrians." But it's not a necessity and not worth the tradeoffs.

    KCM is -- or ought to be -- facing hard choices and not all goals are equal. We can't afford all the nice-to-haves anymore. Aside from the politics, there is no serious argument that (a) the need to maintain bus service within densely populated urban centers is on a par with (b) the desire to connect charming small towns at the outer edges of our mostly rural county.
  • Cleve Stockmeyer
    @4 et al. Thanks, good comments. Total trips should be the primary yardstick so it's disappointing that in the proposed plan they aren't telling us total trip loss. In the prior presentations from last Spring, one plan had 5 million fewer trips than the other plan and that kind of data is certainly important to know about!

    More fundamentally, in the presentations from last spring, "both [proposals, the refined and blended plans] envision cuts to each subarea in proportion to that subarea’s current allocation, in accordance with Metro policy." In other words, the bottom line -- then and now -- is still to ignore the inefficiency built into the current allocation policy, thus perpetuating and guaranteeing an inefficient system and waste of dollars.

    The system should try to serve all riders equally. Losing a service hour that eliminates 75 trips in one place, in order to preserve a service hour that provides 5 trips in another place, is inefficient and unfair. All 80 riders are presumptively equal, so the net gain of 70 should be presumedly the decisive factor. And by following this general principle of treating all riders equally, you will maximize social benefits, too; in the 75 riders on the more productive route there would be plenty of elderly, disabled, and transit dependent folks, likely more than the number of them in the 5 riders on the other route.

    Metro should tell us the ridership impacts of the proposed plan AND alternatives so we and the council have real choices to evaluate.

    This should include total riders and some kind of narrative of where the losses take place, as that is relevant, too.

    We have five or six council members in the denser areas of the county so if they agreed on a policy to represent the riders, not geography, it could be implemented. For now we ought to know the "cost" of the current allocation structure -- rather than being in the dark about it.

    The current policy embodies an allocation that discriminates against riders who choose to live in a city, or near other transit users, or where they can be cheaply served. If we focus service on riders, we might also reach a "tipping point" at which many nonriders choose transit or choose it for almost all trips instead of just for commuting, because it's the most convenient way to get around. This really can't happen when you're serving folks on highly unproductive routes in the outer areas. The focused service model (based on the fact that riders have already focused themselves in denser areas) also lowers the marginal cost of adding trips. So this policy of not discriminating against any riders has profound economic, social and environmental benefits. There's a deeply efficient economy from living near other people, jobs, stores and recreation. If transit policy is not to serve riders equally, then we as a society hours lose that economic, environmental efficiency.
  • ivan
    Trevor @ 1 for comment of the day.
  • eddiew
    Martin at 2: the Triplett suspensions would be according to current policy and proportional to the hours in each subarea: 82/17/21 for W/E/S. Triplett also proposes that suspended hours be restored at that rate if and when new service subsidy is found; that takes a change in policy and may trigger the revolt. gotta find five votes.

    Dan at 6: have you been to Enumclaw? It was developed before WWII and has a street grid and sidewalks; it is like an urban island; a main objective of transit is to extend the range of pedestirans; Enumclaw is a comfortable place for walking.

    Bill at 9 raises some good tactical questions that complement Cleve's point.
  • Bill
    Possibly the most significant piece of the Triplett plan is that it would cut nearly all bus routes by about 9% each. This means even the highest-ridership (mainly Seattle) routes would be cut back, leaving fewer seats, inadequate standing room to prevent passing by waiting customers, and reduced reliability on these routes.

    At the same time, it would result in half-baked service levels on low-ridership, less frequent routes - reducing service to barely useable levels (i.e., if a route runs only every hour or is a peak-hour route that has only a few trips, a missed trip means an hour or more wait).

    To top it off, reliability would be significantly reduced because buses would have less layover time between trips.

    To help Seattleites continue to have a useable system, KC would delete entire weak routes and maintain the capacity, frequency, and reliability of the most important routes.
  • abc
    F-T good points but the schedule to Enumclaw doesn't serve shift-workers (not 9 to 5) - the service is so sparse that it really serves only day workers - they do have some mid-day service but the stops are far far apart.

    We should provide for those that need mobility but does that mean we need to provide it no matter where they live?

    If I retire in Greenwater should the county (Pierce) provide me with regular service to Seattle?

    Density provides efficiencies and we should provide subsidies for people to live where services can be provided efficiently and for all.
  • Preserving ridership is important, but I think more important is preserving access to mobility for poor, elderly, disabled, & shift-workers. If we see transit as a way to reduce car-trips, we get one set of cuts. But if we look at mobility as a civil right, we get a different approach.
  • Dan
    @ cleve - Rational decision-making is hardly the point or the problem. If it were, no one would have ever started bus service between Enumclaw and other "cities" in the first place. In the face of massive budget shortfalls, cutting all such ridiculous service should happen as a no brainer from all perspectives except that County Council is elected by district. And County Councilmembers from each district get a vote. Folks on council don't get re-elected by making wise decisions for the County but rather by protecting and expanding services for constituents they represent.
  • Dan
    @ martin - one-zone peak (within Seattle) is currently $2.00, but two-zone peak is indeed $2.50.

    County Council just raised fares by $0.25 this year and has already decided to raise fares by an additional $0.25 / hr in January 2010 or thereabouts. Triplett's plan would add yet another two $0.25 fare increases: one in 2011. I'm not clear if the second $0.25 increase is on top of currently expected $0.25 in 2010 (for total $0.50 increase in 2010) or something else.
  • Cleve,

    Metro's done a lot of ridership analysis on different alternatives, though not the Triplett plan specifically.

    Here's a good starting point:
    http://seattletransitblog.com/2009/06/22/metro-...
  • Cleve Stockmeyer
    How do we know this is the best way to maintain service to riders, when the plan doesn't even tell us the impact of the proposed changes on trips or boardings? You can't manage what you don't measure.

    We should be evaluating alternatives in terms of preserving or maximing trips or boardings, given the level of money coming in. The mission is to serve riders, not just match service hours to revenue and produce a balanced budget.

    Neither we nor the King County Council can manage what is not measured.

    What's the impact on ridership, where is the loss in ridership taking place, and is this plan the best way to use revenue to maximize ridership -- it's all a just a big nonstransparent box, unless you talk about alternative plans and their impacts on trips and boardings.
  • Uh, Seattle hour fares are currently $2.00 -- so plus 50 cents would be $2.50.

    Secondly, the whole point of Triplett's plan is that the cuts are balanced over the county, so all subareas take an equal hit. It's specifically designed to avoid the suburban revolt you describe.
  • Trevor
    If we click our heels together and say density three times, I bet we can make this all go away.
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