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Cap Metro panel recommends major fare increase

Tuesday, August 5, 2008 by Austin Monitor

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After two decades of being flush with disposable cash, the Capital Metro Transit Authority has finally taken a hard look at its finances, and that means making unpalatable choices such as cutting traditional fare subsidies for the elderly and the disabled.

Cap Metro’s Local Government Approval Committee, chaired by Judge Sam Biscoe, was on the hot seat last night on a proposed fare increase. The committee, made up of representatives of the jurisdictions that comprise Capital Metro’s service area, was on the receiving end of plenty of anger and bitterness over the fare hikes. But despite that, the board voted to recommend a proposed fare hike to the full Capital Metro board.

The measure approved would increase the local bus fare by twenty-five cents, from $.50 to $.75 in fall 2008, and to $1 by fall 2010.

 

As was the case with prior hearings, members of the audience firmly opposed the fare increases, calling them a new tax on those who could least afford them. Seniors and the disabled, in particular, would find the fare increases hard to live with, speakers argued. The couple of speakers who spoke in favor the fare increase, the Chamber of Commerce and the Alliance for Public Transportation, were booed and heckled by audience members.

Committee members, who were all elected officials, were not immune to that anger. It was clear, by the end of the hearing, that the choice to increase fares on the elderly and the disabled would be an untenable solution to the majority of the 10 members.

Former Capital Metro Chair Steve Bayer, who resigned after the last major fare increase in 1990, noted that this was a situation that Capital Metro set upon itself. At the time the fare increase from zero to 50 cents was approved, the goal was to increase fares a nickel a year. That would have left Capital Metro with a current fare of $1.15 and probably a far more stable revenue situation.

Bayer pointed out that fare increases do hurt ridership. Current ridership is only approaching now the numbers of passengers under free ridership, Bayer noted. And that only came with a 50-cent fare and 17 years of population growth.

The only discussion was how the motion would be drafted. Leander Mayor John Cowman, who was seconded by Mayor Pro Tem Brewster McCracken, made a motion to approve the fare schedule. Then Biscoe attempted a friendly amendment to carve out the elderly and disabled. That was followed by some computations by McCracken, with some help from CFO Randy Hume, of a way to pay for the increase.

Council Member Lee Leffingwell, however, was not comfortable with the open-ended nature of the amended motion, saying it was impossible to vote on the motion without some firm numbers. Commissioner Sarah Eckhardt said she would prefer to put more time into the research end of the equation when it came to just how much the working poor should be paying for bus fare.

Commissioner Ron Davis said he would have none of it, unless the proposal considered defraying the cost increases for the poor. No one even hazarded a guess at what that figure might be, nor did anyone else appear to consider that an affordable proposition without some further consideration.

McCracken warned than an amendment on how to gather up the revenue was important because the profit margin on the Capital Metro budget is so thin. If another million were cut in future fare revenue, it could easily guarantee service routes cuts in a couple of years.

Capital Metro’s margin of float, or excess revenue, is down to no more than $1 to $2 million in a couple of years. It will not be until about 16 to 20 years out that the agency will see a profit, Hume said. By the end of 20 years, the agency could have a surplus back up around $600 million, but Hume warned that was very much back-end loaded.

Cowman indicated he thought the current arrangement by Capital Metro of providing reduced-price fare cards to local service agencies was one way to get at the working poor, or perhaps an easier way of addressing the issue.

The Cowman-McCracken motion failed on a vote of 4-6, with Council Members Sheryl Cole, McCracken, Biscoe and Cowman on the losing end.

Then Biscoe made a simpler motion, calling for the fare schedule, minus the increases for the disabled and elderly. That would leave the ways to cut the budget, to cover the $1.2 million in anticipated lost fare revenue, up to the Capital Metro board. That motion passed on a vote of 6-4, with Mayor Will Wynn, Eckhardt, Leffingwell and Biscoe voting in the minority.

After the vote, Wynn asked Capital Metro staff to work up the numbers on the proposed fare increases to the commuter rail and express bus fares. And Eckhardt asked that the staff consider some type of sliding scale fee for the working poor. McCracken said he would work with any interested parties in trying to come up with more reduced-rate passes for social service agencies.

The governing committee’s recommendation is forwarded to the full Capital Metro board. The full board will meet on Aug. 27.

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