Trying to run an urban bus operation without a dedicated tax funding source makes for a rough road, say officials in the industry.
“If you have a dedicated tax source, you can start to plan ahead,” said Virginia Miller of the American Public Transportation Association, a trade group with more than 1,500 public and private members. “It’s essential you have one.”
Wichita Transit doesn’t have a dedicated tax source. It relies on the city’s general fund for nearly 30 percent of its $14.9 million budget, with the remaining money coming from fares and federal and state funding.
But the agency faces a $500,000 shortfall this year, prompting its advisory board on Friday to recommend a public vote to use a quarter-cent sales tax as a dedicated source of money.
“I think it’s viable from a transit perspective and I think it’s viable from the public’s perspective,” said Ron Terzian, the transit board’s chairman. “For the transit-dependent, I don’t want to say it’s life and death. That’s too strong. It’s getting to the job, it’s getting to doctor appointments. It’s fundamental transportation needs. We jump in our cars and go, and they can’t do that.”
On Tuesday, the Wichita City Council will be asked to approve service cuts to make up the shortfall. Those cuts include elimination of 30-minute service intervals during peak hours to save approximately $400,000, elimination of the Goodwill bus to save approximately $20,000 and elimination of the west-side connector to save approximately $80,000.
Sales and property taxes are the main sources for funding transit systems across the country, according to the Federal Transit Authority.
Omaha and Des Moines are among those that use property taxes.
“You always have to be prepared to follow how that revenue source is doing,” said Linda Barritt, an official with Omaha Metro, a public-private enterprise that provides bus service for a population of more than 400,000. “If sales taxes are down, you know your funding will be down. In the Midwest, property taxes are a little more stable.”
More than 50 percent of Omaha Metro’s $26.6 million budget comes from taxes on real and personal property owned by residents. Commercial property is excluded from the tax levy.
Omaha Metro counts on its annual 2.5 percent increase of the levy as part of its regular revenue stream, although it can request an additional 1 percent. This year’s 2.5 percent increase brought in nearly $340,000 for Omaha.
“It would be hard to operate a bus service without a dedicated tax,” Barritt said. “We’re immune to a city budget cut. No one can come in and cut our budget.”
Des Moines’ area bus service, DART, a stand-alone government agency that serves about a half-million people, draws nearly 40 percent of its $26 million from a property tax levy, DART spokesman Gunnar Olson said.
To offset a projected long-range deficit of $1.4 million, DART increased its tax levy this year by 15 cents for each $1,000 of assessed property.
Regardless of funding source, industry officials say getting bodies on the buses is the key to making it all work.
“Be consistent, reliable and easy to use,” Olson said. “If you do those things, ridership will follow.”
A commuter or express service brings in customers, Barritt said. Omaha and Des Moines have one; Wichita does not.
Fare increases can chase away riders.
Wichita Transit’s ride count is down 5.5 percent through the first three months of this year. Mike Vinson, the agency’s director, said last September’s 50-cent fare increase to $1.75 “most definitely” was the cause of that slide.
Des Moines’ DART also has its regular fare set at $1.75 after bumping it up by 50 cents in April 2010. People apparently have adjusted.
Ridership is up 12 to 13 percent over this time a year ago, Olson said.
Omaha Metro’s has kept its regular fare at $1.25 since 2001 and has had steady increases in ride numbers. Last year saw a 6.5 percent jump over 2010, Barritt said.
“You can price yourself out of the market,” she said. “Do we have the fanciest transit shelters on the street? No. Are they clean? Yes.
“There aren’t a lot of doodads around here. We do without sometimes.”
And sometimes it’s about being creative.
Omaha Metro found significant savings by working some good fuel contracts for a fleet of 134 buses that consume 3,000 gallons daily.
It also helps that Omaha Metro can park all of its buses inside a 347,000-square-foot facility. That means it doesn’t have to put costly antifreeze in any of its buses. On the street, the buses are never turned off, Barritt said.
Omaha and Des Moines boost their incomes by contracting service with major businesses so employees can ride certain routes by swiping their employee card.
It’s a win-win for all, they say.
“We get the benefit of a steady, reliable income, and the employer gets to offer benefits to employees,” Olson said.
Omaha Metro is in the process of setting up a similar arrangement with colleges in the area, Barritt said.
Both Des Moines’ DART and Omaha Metro also aggressively go after federal grants. Federal money, however, can only be used for capital expenses and not operating costs.
In November, DART used a $1.13 million federal grant to replace five aging buses with hybrids. Omaha used a federal grant recently to replace fare boxes that were installed in 1989.
“Everything we do is expensive,” Barritt said.
Contributing: Bill Wilson of The Eagle