MTA goal could require passengers to pay 65 cents more

The Maryland Transit Administration has told the General Assembly that it would have to raise Baltimore-area transit fares by 65 cents next fiscal year — a 40 percent jump — in order to meet state revenue goals without cutting service.

Such an increase would have to be followed by another 25-cent increase two years later to meet "farebox recovery" targets. Maryland law requires that transit systems cover 35 percent of their costs through passenger payments, though that goal is missed more often than it is met.

The report doesn't necessarily mean fares will go up by that amount, but it sets a baseline for discussions of an increase — which critics argue would disproportionately affect many of the Baltimore area's poorest residents. The new estimate is higher than the one made in a similar report last year, when the administration said base fares would have to rise from the current $1.60 to $2 to meet the farebox goal.

The question of raising MTA fares is a perennial one in Annapolis. Rural and outer suburban legislators, whose constituents seldom use transit services, tend to push for higher recovery rates, while urban and inner suburban lawmakers resist.

Sen. Nathaniel J. McFadden, a Baltimore Democrat who represents some of the city's most transit-dependent riders, said that while he expects fares to go up, a 65-cent increase would be cause severe problems for low-income workers in a limited job market.

"We'll have to have discussions of something more moderate," he said.

But Del. Anthony O'Donnell, the House minority leader, said the burden of paying for transit systems falls disproportionately on Marylanders such as his Southern Maryland constituents.

"Farebox recovery needs to be part of the discussion. We cannot continue to subsidize these very expensive transit systems as they are," the Republican said.

The O'Malley administration, faithful to its largely urban constituency, has never raised fares but has been challenged by general pressure on transportation budgets. The question of fares is likely to come to a head in the next session, during which the legislature is expected to consider a possible increase in the gas tax and fees that largely fall on motorists.

State Transportation Secretary Beverley K. Swaim-Staley said the administration expects there to be a connection between fares and other revenues in the session that begins Jan. 11. But she indicated the administration would resist any drastic fare increase over the short term because of its impact on low-income Marylanders.

"We'd have to be very clear about the impact that would have on a very critical part of our population and their ability to access jobs," she said.

Sen. James E. DeGrange Sr., chairman of the Senate subcommittee that oversees the transportation budget, said he believes the legislature would not accept any move to lower the 35 percent requirement, noting that the farebox recovery target has gradually been moved down from 50 percent. But he indicated it might not have to jump to $2.25 in one step.

"They do need to meet that 35 percent because our Transportation Trust Fund is in need of help," the Anne Arundel County Democrat said. "I still think there's ways of phasing this in."

The MTA, which was required under last year's budget legislation to file a report this month, said the combined fare recovery for Metro, light rail, the bus system and other local services is expected to reach 29 percent during the fiscal year ending June 30. That's slightly up from a low of 28 percent two years ago.

To quickly reach and maintain the statutory goal of 35 percent through fares alone, the MTA said, the agency would have to raise the base fare from the current $1.60 — where it has stayed since being increased under then-Gov. Robert L. Ehrlich Jr. — to $2.25 in the next budget year. The rate would hit $2.50 by July 2014.

An alternative, the MTA said, would be to achieve the farebox goal entirely through service cuts. But without an accompanying fare increase, that would require cuts of more than 20 percent in basic services — bringing layoffs of union-represented and management employees.

The MTA said such a move would also require the sale of part of the bus fleet, which would mean the agency would have to repay the federal government for its past help in paying for those vehicles.

Transit officials argued against a cuts-only approach, saying it would set off a "cycle of declining service and declining ridership [that] should be avoided at all costs." The agency did not outline any intermediate strategy that would mix service cuts and fare increases.

In recent years, the state has maintained the reach of its transit services largely by devoting an increasing share of the overall transportation budget to transit operations at the expense of highway projects.

But even with that additional spending, the MTA has had to cut back severely on such expenses as operator overtime. Regular riders, such as Ed Cohen of Baltimore, have noticed the results in the form of canceled bus runs and longer waits at stops.

"Right now there are people losing jobs because the MTA is not reliable," said Cohen, past president of the Transit Riders Action Council of Metropolitan Baltimore.

Cohen said a 65-cent jump would be too much for low-income riders — who make up the majority of the MTA's customers in Baltimore — to absorb. Most use monthly or weekly discount passes, but the cost of them would likely rise in proportion to base fares, he said.

The administration has not necessarily done MTA riders a favor in the long term by holding rates steady for so long, said Cohen, who added that he would not object to an increase to $2. He said it would make more sense to make regular fare adjustments according to a formula rather than to wait for political leaders to make rate-setting decisions.

"At least the increases would be manageable to people," he said.

By holding its fares steady since 2003, the MTA has become an outlier among U.S. transit systems. Since then, most transit agencies have raised fares — some more than once. According to the American Public Transit Association, in 2010 alone, half of large transit agencies raised fares.

While MARC's farebox recovery rate remains higher than the Baltimore area's transit systems at 44 percent, it has slipped in recent years amid higher operating costs. Swaim-Staley said she doubted the commuter rail lane would be spared if there were an increase in other transit fares.

The MTA's Baltimore-area core bus service, with farebox recovery of above 30 percent, actually stacks up quite well against other large metropolitan bus systems and has much higher returns than most of the smaller public transit systems across the state and country. In Indianapolis, for instance, figures supplied by the American Public Transit Association show that the bus system recovers less than 20 percent of its revenues from fares. Annapolis Transit recently posted a farebox recovery figure of about 16 percent.

But the overall Baltimore system's numbers are dragged down by the low farebox recovery of the Metro and light rail systems, which are both single-line systems hampered by poor economies of scale. The highest recovery rates tend to be seen at transit agencies with extensive rail systems that are used by broad segments of the population — such as the subways in New York and Washington.

Mahlon G. "Lon" Anderson, public affairs director for AAA, contends the package of $870 million a year in revenue increases proposed by a commission on transportation funding comes down far too hard on motorists at the expense of other users of the transportation system. He said that if the gas tax and other road-use fees increase, transit fares should follow suit. But even though he's an advocate for drivers, he said fare increases can reach a point of "diminishing returns."

"You put millions of dollars into mass transit infrastructure and then you discourage its use by raising revenue," he said. "It's at some point self-defeating."