Is $100 Million Enough to Hold on July’s Metro Fare Hikes?

4_13_10_bus.jpgAre we racing to fare hikes for no reason? Photo:

As part of the compromise allowing Governor Schwarzenegger to eliminate the gas tax and replace with with an excise tax (ABX8 6 and ABX8 9), monies collected from the diesel tax are being used to partially replace the funds being removed from the State Transit Assistance Fund (STA). Despite the removal of the transit funding mechanisms in the gas tax, these bills ensure that transit operators have steady funding for operations by using the sales tax on diesel to replenish the State Transit Assistance Fund (STA).

In L.A. County, that means that, for at least one year, that $115 million will be coming to help aide Metro and other regional operators during this time of major fare hikes and service cuts. For L.A. Metro, the agency that already has an increase on the books for this July, the nearly $100 million it will receive, $99.8 million to be exact, will go a long way in relieving the quarter of a billion structural deficit on the books for the fiscal year beginning July 1.

Some advocates are already looking at the arrival of these state funds as reason to hold off or cancel this summer’s fare hikes. Esperanza Martinez, from the Bus Rider’s Union, argues that

It should definitley go to stop the proposed 2010 fare increase, protect the 145,000 hours of bus service proposed to be cut in the 2010 budget. The proposed 2010 fare increase will bring about $24 million, the MTA could stop it with the $115 in STA funds, clearly this would help protect many of the jobs that MTA is talking about cutting.

Of course, not everyone feels that way. Other advocates have argued, and the L.A. Times agrees, that fare increases are necessary because Metro has a low percentage of its operations paid for at the fare box, 26% compared to 40% at most other major city agencies, and state money won’t change that.  A stable "farebox recovery ratio" is considered a hallmark of stable transit operations

The Metro Board of Directors hasn’t made any decisions on how to use the $115 million, or decide if it will have any impact on this summer’s hike. The state has been vague about when agencies can expect this cash infusion, and as a result the Metro Board doesn’t want to spend money until it knows when it’s arriving.

However, it does appear that the crisis for transit operations caused by repeated raids on the STA might be over.  SF Streetsblog printed the details last month.

"We see this as making great progress toward establishing stable and
reliable transit operating funding," said California Transit
Association (CTA) Spokesperson Jeff Wagner. "While it eliminates
sources of funding that transit should have been getting, it will
create a source of funding that will provide transit with far more than
it has been getting, on average."

According to the CTA, the
laws signed by Schwarzenegger will establish a baseline of $350 million
each year for transit operations starting in 2012, with allocations
projected to reach $400 million in 2016-17 and $500 million in 2020-21.
Compare that with the average annual STA allocation of $258.5 million
over the last five years and $189.9 million over the last ten years and
operators could see light at the end of a long tunnel of state transit
raids.

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