Metro expects to boost fares
By Dana Hedgpeth,
Metro bus and train riders should prepare to pay higher fares next year as the transit authority tries to close a $124 million budget gap.
“I will say that fare increases are coming,” Metro Chief Financial Officer Carol Kissal said Thursday.
At a finance committee meeting of Metro’s board of directors, Kissal provided a preliminary look at the budget for fiscal 2013, which starts July 1. The budget estimates revenue and subsidies from local jurisdictions of $1.43 billion, but expenses of $1.55 billion.
Kissal noted that Metro faces a $3 million drop in revenue, just as pension costs for its employees are expected to be an additional $29 million because of poor economic conditions that caused the funds to take a hit. Metro is also expected to have higher expenses as its labor costs rise $22 million, due in part to a 9 percent retroactive wage increase that it was court-ordered to give its employees. The agency is also facing a $9 million increase in health-care costs.
Kissal said Metro is not proposing any cuts for next year’s budget, but officials are considering some changes in fare structure.
The authority hopes to simplify rates, which charge different fares based on the distance traveled and the time of day. Another option would be to raise rates 10 cents on the bus and rail networks and implement a pay-by-zone system on trains.
The board would make a decision on increasing fares in the early months of next year, and any changes would go into effect in July. Public hearings would also precede any action.
The expected $124 million budget gap for fiscal 2013 follows last year’s budget gap of $66 million, which area jurisdictions covered with additional subsidies.
They could also face paying more next year, Kissal said, with just $60 million coming from increased fares. However, many governments have faced their own financial troubles.
In 2010, Metro implemented the most expansive fare increase in its history, including “peak of the peak” rates for rail users who travel during the busiest times.
Any fare changes for next year “won’t be as aggressive as they were a few years ago,” according to Kissal.
Metro is expected to renegotiate its contract, which expires in June, with Local 689, the union that represents 10,000 of its employees.
“Some of the packages we have may be too rich in terms of what we can do in the future,” Kissal said.
The proposed fare boost comes as riders face a decrease in the amount of pre-tax money they are allowed to set aside for transit. Congress temporarily increased the amount as part of the federal stimulus plan, and again last year, but the benefit is scheduled to expire at the end of this year. The amount would fall from $230 per month to $125. Parking benefits, however, would rise from $230 a month to $240.
Metro General Manager Richard Sarles called it “nuts” that Congress would allow the parking benefits to increase while the transit benefits decline.
“We’re trying to encourage people to use transit,” he said. “To take away half of the benefit doesn’t make sense, especially in the worst traffic congested area.”
Metro officials have said that the reduction in transit benefits could cause a 2.8 percent annual drop in ridership.
“We’re still suffering ridership going down because of the economy,” said Jeff McKay, an alternate board member from Fairfax County. “How much ridership will we lose if we raise rates, too?”