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Charm City Circulator running $11.6M deficit

Baltimore's popular Charm City Circulator is operating at a $11.6 million deficit, according to an analysis released Tuesday by Mayor Stephanie Rawlings-Blake.

The free bus service's deficit is projected to expand to $73.2 million over the next 10 years unless city officials figure out how to pay for it, according to the internal study. More than 4 million people use the Circulator each year.

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The mayor said her administration is evaluating whether to eliminate routes or increase wait times, charge a fare or raise the tax on parking in city garages.

Rawlings-Blake said officials plan to first study ridership trends and that she wants to exhaust all options before considering a fare or parking-tax increase.

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"I want to find other options; I don't want to charge a fee," the mayor said. "It needs to be a self-sustaining program. I think we can get there without charging a fee."

The Circulator launched in January 2010 and was running a deficit almost immediately. By 2012, the circulator cost more than $15 million to operate and generated only $6.2 million in revenue.

Costs — which have been covered by the city's general fund — have outpaced revenues every year since.

Ads sold on the buses have fallen short of projections. Meanwhile, costs increased with the addition of the Circulator's Banner Route between the Inner Harbor and Locust Point and the bankruptcy of a fleet vendor that led to unbudgeted vehicle payments.

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Henry J. Raymond, Baltimore's finance director, said the city already has raised the parking tax from 16 percent to 20 percent in recent years. A portion of the tax helps fund the Circulator. Raising the tax from 20 percent to 21 percent would generate $1.16 million in the first year.

A consultant has been hired for $130,000 to explore options, and a report is due in January. Rawlings-Blake said any charges to the Circulator are expected to be part of her administration's budget next year.

The city's own study found that many comparable circulator services charge a fee to ride, including $1 fares charged in Washington, Milwaukee and Portland, Ore. Annapolis leaders agreed in October to charge $1 fare.

But Kirby Fowler, president of the Downtown Partnership, opposes adding a fare for the Baltimore Circulator or raising the parking tax.

He said the city should consider making changes to the Green Route, which carries about 56,000 riders a month, and the Banner Route, which has the lowest volume of riders at 28,000 passengers a month. About 150,000 riders use the Purple Route each month and 110,000 take the Orange Route.

When the Circulator was established, costs were to be covered primarily through an increase in the parking tax. But the service has been extended, adding additional strain on the system without built-in revenue streams, Fowler said. Additional stops in Charles Village are planned along the Purple Route.

"The Circulator is a victim of its own success," Fowler said. "Extensions should only be supported by new funding sources."

City Council President Bernard C. "Jack" Young has called for a hearing on whether the city should charge passengers a fee to ride the buses, given that many residents have asked for the free routes to be expanded. The hearing is expected to be scheduled for next year.

Young said a greater portion of the millions of dollars the city already collects from the parking tax could go to the Circulator. "I wouldn't support a parking tax increase," he said. "Another parking tax increase would put Baltimore at a competitive disadvantage."

Councilman Eric T. Costello, the newly installed representative for Federal Hill, Locust Point and downtown, said he's concerned officials might eliminate the Banner Route and thinks a fare should be a last resort. Costello said officials should consider resetting route schedules according to ridership and look at any overlap with the state's public bus system.

"The Circulator is an amazing amenity," he said. "A lot of people rely on it."

Baltimore Sun reporter Luke Broadwater contributed to this article.

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