Wednesday, July 16, 2008

U.S. cities scrambling to meet rising mass transit demands

According to CNN, some transit systems in the US are having a hard time keeping up with the demand for public transit. They are running out of money.
While the rise in ridership has been a relatively easy adjustment for some systems, others are facing difficulties in meeting operating costs, which hampers their ability to ramp up service or maintain normal levels.

Cal Marsella, the head of Denver, Colorado's transit system, calls it the "paradox of public transportation."

Denver's system, like many U.S. cities, is partly funded by revenues from sales taxes. As consumers spend less because of high fuel costs and a sour economy, the city earns less revenue. Consequently, funding for the transit system is decreasing just when their operating costs are higher than ever before.

"Just when our demand is highest, our ability to provide is being undermined by the whole crunch," Marsella said. "The last thing we want to do is curtail service but there is not a lot you can do when revenues are down and fuel prices are up."
Translink is also having the same issues. According to their annual report, gas tax accounts for about 30% of their total revue. The tax is not based on a percent, but a fixed $0.12/litre on gas. So while demand for transit is up, cost of diesel for Translink is up, and therefore the operating cost of transit is going up, their major source of funding is stagnating. This is reflected in their 2007 financials. It is ironic that as more people choose transit and leave their car, the less service Translink can provide.

Translink's other major sources of revenue are fares (38%) and property tax (28%). The mayors of Metro Vancouver will not raise property tax or transit fares beyond inflation, so that leave Translink in a really pickle. Who will step up to fund Translink in a time when good quality public transportation is so desperately needed?

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