[speedgibson] Speed Gibson: A "Fare" Tax?

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Posted by Speed Gibson:
A "Fare" Tax?
http://speedgibson.powerblogs.com/posts/1213937003.shtml


   Metro Transit is [1]seeking a fare increase this Fall, effective
   October 1. They're [2]forecasting a $15 million shortfall next year
   despite a recent surge in ridership. Fuel costs are going up and the
   dedicated funding from motor vehicle sales taxes is significantly
   below projections.
   This seems reasonable at first. We've seen the price of gas go up
   sharply, painfully, and we know diesel fuel is going up at least as
   fast. Metro Transit used 7.5 million gallons last year, and fuel will
   cost about $4.5 million more this year.
   But look closer and you'll find that the real reason for the deficit
   and the fare increase may really be - Light Rail.
   ***
   It's hard to get recent operating loss figures for the Hiawatha Line
   but maybe I can get some at the public hearings scheduled in July (see
   link above). Supposedly it's around $20 million a year, millions more
   than the total deficit, meaning that the buses themselves are in the
   (subsidized) black.
   Also, it seems odd that increased ridership should drive metro transit
   further into the (subsidized) red. Almost all of its costs are fixed,
   fuel prices being the obvious exception. If as it appears to me fares
   cover 25 percent of the costs and fuel even now is maybe 10 percent of
   the cost, increased ridership should be good, i.e., reduce the deficit
   further.
   In other words, with the MVET Light Rail slush fund coming up short,
   the bus riders must pay a "fare" tax to make up the difference.
   Developing ...

References

   1. http://www.metrocouncil.org/news/2008/news_606.htm
   2. http://www.metrocouncil.org/directions/transit/transit2008/MVSTFundingJan08.htm