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ITP Debates Twin Evils
Options for re-balancing the fiscal 2003 budget include capitalizing operating expenses, reducing by 50 percent the planned contribution to retained earnings, raising passenger fares and suspending weekday evening and weekend paratransit service for six months.
Board members will weigh in on a budget balancing resolution at their March 26 meeting.
Suspending weekday evening and weekend suburban paratransit service from April 1 to Sept. 30 would save some $68,000 during the second half of the fiscal year.
Public hearings are required before transit fares can be increased, and the proposed fares could be tweaked based on public input, said Peter Varga, executive director and CEO of The Rapid.
The bus fare structure was last changed in October 1998, at which time the prices of monthly passes and adult ticket fares were raised.
Fare hikes as proposed would increase revenue by about 7.5 percent to $232,000 for the second half of the year. ITP staff projects the increases would likely result in a decrease of more than 230,000 passengers over that time period.
Board member Terry Schweitzer said that since higher fares stymie the ability of certain segments of the public to take part in mass transit, the transportation needs of working residents have to be figured into the balance.
Hikes in the cost of student tickets and monthly passes are the most significant of those proposed, reflecting increases of 33 percent and 16 percent, respectively.
According to The Rapid, use of monthly passes jumped more than 24 percent between 2001 and 2002, while cash fare and adult ticket use decreased by 4.8 percent and 3 percent, respectively.
The board also discussed a millage renewal at last month's meeting.
In April 2000 voters approved a 0.75 millage levy for five years to support existing and enhanced public transit services.
Board member Win Irwin said he would be reluctant to approve a recommendation for a 0.75 millage renewal because with trends showing ridership increases, a 0.75 millage renewal might actually mean a reduction in service levels. Ridership has grown 65 percent since 1995 and the growth trend continues.
"I need more help before I decide that that's a good recommendation," Irwin said. "I think we realize this is a terrible time to go to the public and ask for more taxes. The timing couldn't be worse. If we're going to think about November of this year we only have a month or two months to make a decision."
The Executive Committee recommended a millage renewal proposal be placed on the Nov. 4 ballot. ITP Chairman George Heartwell said it would cost the ITP about $150,000 for a special election.
Finance Committee Chair Sharon Brinks said she doesn't like the idea of making service cuts but supports seeking a renewal of the millage in November.
"We need to work for a consensus of where we are going with transit in this region in terms of looking at potential county-wide issues and some additional partnerships," Brinks said. "We need to ensure what we have right now in terms of a baseline. We need to send a strong message to Lansing that we need the transit funds to keep our promises to local communities. I do not think the timing is right right now to go for an increase in the millage this November."
Varga said the current millage is in place for five years and can't be retracted. But he explained that the ITP could follow the example of Detroit's SMART suburban transit authority, which asked voters to approve a ballot proposal that voided the old millage rate and supplanted it with a new rate double that of the former rate.
"There are ways you can handle that and the question has to be framed in very specific language so it's clear what you're doing," he added.
Brinks asked when the board might know whether 0.75 mills will be enough to ensure no cuts have to be made in services.
Varga said one of the problems is that the ITP doesn't know with certainty what state operating assistance is going to be. The first indication is the total appropriation amount in the governor's budget, he said.
"If she significantly increases appropriations and the legislature looks like they're going to approve it, then we have a good chance of meeting the 40 percent rule that applies," he said, referring to the match in state operating assistance. But the ITP won't know what the appropriation will be until everybody in the state of Michigan submits their requests for services.
"Assuming there's no more loss in the budget we probably can patch another year together and not put reserves aside, use capitalized maintenance again and do something like that. That's one way of doing it." Varga said. "But if Granholm's budget includes cuts, it's a whole different ballgame."
The board will pick up the millage renewal discussion again at its meeting later this month.
At the February meeting, representatives of both Faith In Motion and Concerned Citizens for Improved Transportation encouraged the board to seek a millage rate higher than the current 0.75 mills.
They also said they would support fare increases and asked the board to "take the next step" and expand service.The ITP board encourages residents to complete The Rapid's current survey regarding its five-year vision plan and options for improving the transit system. Forms are available at The Rapid headquarters and online at www.grata.org.