Around state, transit systems are facing bad scenarios
by C.B. Hall
A Whatcom Transit Authority bus rolls through Bellingham (2007). Credit: Joe Mabel/Wikimedia Commons
The best that can be said about the fortunes of Washington’s local bus systems, in these lean years of recession, is that managers are learning how to cope with adversity.
“We’re sort of bouncing along the bottom,” says Richard DeRock, general manager of Link Transit, which serves the Wenatchee area. “We didn’t have a whole lot of reserves coming into this recession. We’ve been burning through them not quickly, but a lot faster than we expected.”
With 21 routes, 55 vehicles, and a budget of $10.3 million, Link is “small- to mid-sized,“ in DeRock’s words, and in many ways typifies Washington’s local transit operations. It does however cover 3,500 square miles of territory — the state’s largest transit service area. Its fares do not exceed $2, even on the longest routes, and passengers defray only 6 percent of operating expenses; the stateside average is 12 percent. As with almost all the state’s local bus systems, a sales tax component levied within the service area provides the bulk of operating revenue – 76 percent of it, to be precise. And when the economy sags, sales tax revenues droop, too, necessitating some hard decisions.
Link’s sales tax receipts plummeted 13.5 percent between 2008 and 2009, and have dropped about another 1 percent this year. In northwestern Washington, the Whatcom Transportation Authority’s (TWA’s) sales tax income has fallen almost 12 percent since 2008. Bremerton-based Kitsap Transit saw 17 percent of its sales tax funding evaporate in 2008 and 2009.
In a more high-profile situation, Metro Transit in King County is looking at its options for cuts and efficiencies, with a task force’s report being unveiled at noon today (Nov.5) and going to the King County Council on Monday (Nov. 8). But similar challenges face smaller agencies around the state.
“All of (Washington’s) systems are trying to make adjustments first before having to go out to the voters to ask for a sales tax hike,” says Geri Beardsley, executive director of the Washington State Transit Association, which represents 25 providers. State law limits transit agencies to a .9 percent sales tax component. Four agencies, including King County Metro, have already reached that limit, while several others, including Kitsap Transit, which stands at .8 percent, are getting close to it.
“We could only go .1 percent higher — if we dared ask the voters for anything right now,” says Richard Hayes, Kitsap’s executive director.
The adjustments Beardsley refers to can involve raising fares, reducing services, or reshuffling routes to squeeze more service out of each revenue dollar. Early in 2009, Kitsap, for example, bumped its basic fare up from $1.50 to $2 and pruned services by 17 percent – precisely the drop in sales tax receipts. Promptness of action removed the need to dip into cash reserves, Hayes reports.
“By mid-2009 we were back to a sustainable level of operations. We gained a lot of revenue, but we probably lost 15 percent of ridership. Having the commuter base has made things better than it might be elsewhere in the state. A high percentage of the people in Kitsap are well employed in Seattle and can afford the higher fares.”
Deferring capital investments, such as for new buses, can also improve the arithmetic. Plenty of other public agencies rely on local sales taxes, too, so asking voters to dig deeper in hard economic times is clearly the last resort.
Still, Beardsley notes, two of the three agencies that sought sales tax increases earlier this year received them. For Bellingham-based WTA, the one agency that saw its request get the thumbs-down, it was demographics that proved fateful in its first attempt.. In Bellingham, 65 percent of voters approved the proposed .2 percent hike in the tax. Sixty percent of the WTA service area’s population lies outside the city, however, and doesn’t get nearly the transit coverage — and there the referendum garnered only 35 percent support.
Bellingham formed its own transportation taxiing district and passed a measure on Tuesday that it will use to restore some service cuts.
When its sales tax vote came up short, WTA opted for a 14 percent cut in bus service — all Sunday service disappeared — and instituted a range of other economies. Still, Nicholson says, “we’re still burning through our reserves a little bit, at the current rate of spending.
“We let go of a director, mechanics, a supervisor — there were quite of number of services that we put a halt on.”
So far, he says, “ridership seems only down about 8 percent. That’s about what we expected. About half of the people affected migrated to other routes, and about half aren’t riding.”
Beardsley surmises that 2011 will see at least three other tax votes around the state. Transit administrators don’t expect the winds of recession to abate anytime soon.
For Link in Wenatchee, too, a lack of riders is not the issue. “Some of our long-distance commuter service is standing room only,” DeRock reports. “We have people riding 50 to 65 miles wondering if they can get a seat. I have to tell them I don’t have any money for new buses.”
Like transit operators across the country, Washington’s providers find themselves in a tough spot. For many people, unemployment is making maintenance of a car dicey, and the slip in consumer spending, and hence tax receipts, can mean less transit service for a larger carless population. Plenty of jobless people are sitting at home, but plenty need transit to chase down such job opportunities as exist. In rural areas, the fact that people who live far out in the country may consider transit irrelevant – and may vote accordingly on a tax measure – makes solutions that much trickier.
For all the uncertainties of the day-to-day situation, as many less obvious questions loom on the horizon.
“Our expectation is that federal funds are going to be more challenging in the out years,” DeRock says, referring to the stalled process of renewing federal surface transportation legislation, which bankrolls many transit programs.
“Our ability to weather a federal cutoff in funding is really limited,” he continues. “We have a rainy day fund — two months of funds. I’m not trying to be doom-and-gloom, but there is a scenario where we run out of money. In the short term I could see this happening.”
“We’re negotiating with the union on health-care costs,” Nicholson mentions, citing another hovering issue. “It looks like we can maintain the current level of service for three or four years. I would predict that we’ll go after a second sales tax vote in two or three years.”
Hayes reports that Kitsap has “struggled pretty hard” with its drivers’ union, the Amalgamated Transit Union. “We’re in arbitration with them right now. We’ve had good collaboration from the other unions (that represent our workers) — the teamsters and machinists.”
“Right now, everybody’s treading water,” Nicholson sums up.
Hayes summons a bit more optimism. “We all have pieces of service that don’t perform well. In this sort of setting you have to address them, which is probably good, and you address the question of how many administrators do we really need. It will put our agency in a better position in a couple of years, if there are any opportunities for growth.”
This story has been updated to include the Bellingham tax vote of Nov. 2.