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Advocates for Poor on Board With Approved MTD Rate Increases
The MTD board of directors adopted a new rate schedule Monday night that drew cheers from members of an advocacy group for the poor.
The board, whose meeting began in front of a packed house, mollified the advocates by lowering the amount of fare increases proposed by MTD staff in the categories that tend to be used most by the financially disadvantaged, including 10-day passes for k-12 students and seniors.
All told, the rate hikes will generate about $1.46 million — about $200,000 less than the initial proposal would have yielded, and just shy of the bus provider’s projected shortfall of $1.5 million.
The new fares mean that, beginning Jan. 1, the cost for an adult single ride will jump to $1.75 from $1.25. The single-ride cost for seniors will increase to 85 cents from 60 cents.
The board also decided to raise the cost of bus fares 40 percent for students at UCSB and Santa Barbara City College. The SBCC rate hike was less than final because its contract with MTD requires voter approval by the students.
Among the cost increases that came to the relief of PUEBLO was the price of a 10-ride pass for K-12 students, which increased to $8.25 from $7.50. MTD staff on Monday originally had proposed an increase to $10.
Seara said many of the families represented by her organization purchase the 10-ride passes. She said they tend to shy away from the 30-day passes, which make for a better deal in the long run, but require too much cash upfront for some families.
Another price increase that fell in line with her request was the 30-day pass for seniors, which will rise to $20 from $18. MTD staff had proposed an increase to $27, she said. In addition, Seara and PUEBLO were moderately pleased with the decision to increase the fare for adult 10-ride passes to $11.50 from $10. They were hoping for $11, but the final amount was lower than the originally proposed $12.50.
MTD raised the amount of the proposed fare increases for commuters who use the Valley Express. Ten-day passes will jump to $50 from $35; the original proposal was for $45. Thirty-day passes will rise to $160 from $120; the initial plan called for raising it to $150.
As for SBCC, any fare increase of more than 20 percent requires a vote of approval by students, officials said. The college has a contract in place with MTD in which all students pay a bus fee, thereby reducing the cost of a student bus pass. If students vote against it, then those who would like to ride the bus would need to pay the regular rate.
If approved by students, semester-long passes would rise to $24.50 from $17.50. Summer passes would increase to $10.50 from $7.50.
MTD Assistant General Manager Jerry Estrada noted that “24.50 is the cost of half a tank of gas. That’s still a heck of a deal.”
Fares cover only about 40 percent of the agency’s operating budget. The rest comes from state sales taxes, federal taxes and local Measure D sales taxes. Those amounts have stayed the same even as operating costs have risen, MTD officials say.
Noozhawk staff writer Rob Kuznia can be reached at rkuznia@noozhawk.com.
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» on 09.09.08 @ 09:14 AM
To elaborate on this news article, the Voodoo Economics in my testimony to the MTD Board was about how the staff proposals (economic models) incorporated assumptions on how many riders would shift their payments from cash in the fare-box shifted to various types of pre-paid passes that cost less per bus ride but also must be purchased prior to the bus ride.
The coalition of PUEBLO, COAST, SBWPC, SBCLUE, AFSCME, and others, and SBCAN (where I am a Director on the Board) all analyzed the several staff proposals during the past two months and we determined they were a bit arbitrary and/or faulty about the demand-shift elasticity values of how riders were predicted to shift from cash fares to passes.
The literal bottom-line goal to raise MTD revenue by $1.5 million was highly sensitive in that economic model about the percentage values for the demand shift elasticity.
For instance, a 10% difference in the assumed number of bus riders who would pay with passes instead of fare-box cash could yield an approximate $500K difference in the bottom-line revenue, thereby influencing the decision on what the price of those passes would be.
My remark about Voodoo Economics was intended to raise attention to the sensitivity and arbitrariness in the economic model about the assumptions of the demand-shift elasticity.
Perhaps encouraged by such pointed rhetoric, the MTD Board of Directors also focused on how these staff assumptions were too linear and seemingly arbitrary for the values incorporated into the economic model.
In the end with the MTD Board deliberation, the price of the various bus fares were modified and their demand-shift elasticities in the model were adjusted to values that still were reasonable assumptions that would yield a revenue increase of about $1.4 million for MTD.
This resulted in an overall price structure that caused minimal increases in the types of bus passes used by people in our community who can least afford a raise in bus fare prices.
That was the goal of the coalition of PUEBLO, SBCAN, COAST, SBWPC, SBCLUE, AFSCME, and others.
Not reported in the article was an additional motion passed by the MTD Board about looking into additional rider customer service enhancements, such as offering a 7-day bus pass option that would benefit local people who cannot afford the larger investment of buying a monthly pass.
Of course, this is really all moot if Measure A does not pass on the November ballot. Nearly all of the funding for MTD will be dependent upon the revenue attained through the suite of projects funded under Measure A. If this ballot measure fails on the November ballot, MTD will have to raise fares drastically and cut services deeply.
No other Voodoo Economics will be able to get around that factual reality if Measure A does not pass.
» on 09.09.08 @ 12:32 PM
In civilized countries, private motor vehicle fuel costs $8.50 a gallon.
Most of that is taxes used to offset the billions of dollars a year in subsidies for driving alone.
And one of the uses of that money is to pay for decent public transit.
Public transit should be free. And if private motor vehicle users paid there way, there would be more than enough money to do so.
In fact, Schwarzenegger gave a $4 billion/year handout to motorists as his first act in office. Take that back and you’ve got all the money you need.
» on 09.09.08 @ 01:22 PM
Nice to see some of the local activists recognize economic reality and the need for a price increase. Presumable they ensured that the MTD will not make “obscene profits” from the new fares. Regarding Arnold’s “handout” to motorists, some would say that he was simply reversing an obscene tax.
» on 09.09.08 @ 04:04 PM
“In civilized countries, private motor vehicle fuel costs $8.50 a gallon.”
Excuse me? I always thought I lived in a civilized country. Having lived in Argentina, Canada, Mexico, France and Japan, I know the United States is a civilized country.
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