No Fare Hikes in MTA Budget Plan
In many ways, this is a golden age for the long-troubled Metropolitan Transportation Authority, with new rail lines in the works and growing ridership on both its trains and its expanding network of fast buses.
But although MTA officials managed to avoid fare hikes and service cuts in the budget proposal unveiled Monday, they called for the agency to dig deeply into its reserve fund, bringing it to an all-time low because of a $131-million shortfall.
Some MTA directors expressed concern that the deficit would make fare hikes and service cuts inevitable.
“I think what we are doing isn’t sustainable into another year,” said John Fasana, a Duarte City Council member, during a budget workshop.
Another director, attorney David Fleming, urged the staff to look for more administrative cuts.
“Politically and morally -- because we’re talking about raising fares someday for people who can barely make ends meet now -- we have to make sure that we have cut everywhere we can,” he said.
The budget discussion came one week after dozens of members of the Bus Riders Union packed a transit meeting, demanding that fares and service be spared in this year’s budget process.
Speakers asked Los Angeles Mayor Antonio Villaraigosa, who leads the MTA, to pledge not to raise rates or cut services in the next four years.
Villaraigosa declined to do so, saying that such a lengthy commitment “is asking a lot.” But he said he would “do everything possible to avoid a fare increase.”
Passenger fares and advertising will make up about 10% of the proposed $3-billion budget for the fiscal year that begins July 1. More than 63% of the MTA’s revenue comes from sales taxes.
Ridership is expected to rise 6%, MTA officials said, generating an additional $15 million in fare revenue.
MTA’s newest service, the 14-mile Orange Line from North Hollywood to Warner Center in the western San Fernando Valley, opened in October and quickly surpassed ridership expectations. More than 18,000 people use the bus line on weekdays, triple MTA’s initial projections.
Still, MTA staff predict that fare collections will account for less than a quarter of the cost of running the massive public transportation system.
The MTA’s reserves will drop to $66 million by the end of the next fiscal year, if current estimates hold. Those savings already have been dramatically whittled down from $427 million in fiscal 2005.
During Monday’s budget discussion, Villaraigosa asked MTA staff to “think outside the box” in searching for ways to increase revenue. He suggested trying to boost advertising sales and attract more riders.
Despite shortfalls, the proposed MTA budget seeks increases in bus and rail service.
Funding concerns are not expected to affect ongoing construction of the six-mile extension of the Metro Gold Line from Union Station in downtown Los Angeles to East Los Angeles or building of the 8.5-mile Exposition light-rail line from downtown Los Angeles to Culver City, which is set to begin this summer.
Although construction funds for those projects are secure, Fasana said, he was concerned about running the lines once they were built. If they opened this year, he said, “I don’t know if we could afford to operate them.”
Metro Rail ridership rose more than 10% this year. To meet increased demand, the MTA plan calls for 19 new light-rail cars on existing lines. To accommodate more bus riders, the plan proposes adding 94 more long buses on its rapid lines -- including those on Wilshire Boulevard and from Van Nuys Boulevard to Westwood.
The MTA wants to introduce seven new rapid bus lines -- on Santa Monica Boulevard, on Pico Boulevard in Santa Monica, on Long Beach Boulevard and Pacific Avenue, on Reseda Boulevard, on San Fernando Road and Lankershim Boulevard, on Central Avenue between downtown Los Angeles and the Metro Blue and Green lines, and on Atlantic and Fair Oaks boulevards.
The agency also proposes more carpool lanes, including lanes on the Golden State Freeway between the 118 Freeway and the Hollywood Freeway and between the Antelope Valley Freeway and the 118, and on the San Diego Freeway between the Marina and Santa Monica freeways.
The MTA’s operating costs have increased in the last five years, in part due to court orders to add bus service. High fuel costs will drive up expenses too, and the agency is asking for $14 million more than last year to cover them.
To balance the budget, officials are relying on the state’s promise to give the agency $10 million in Proposition 42 transportation sales tax, money it has not received in recent years, MTA officials said.
The budget also proposes deferring one-time capital costs, such as rebuilding 20 bus engines, and cutting $5 million in administrative costs in such areas as supplies, services and travel.
The MTA will hold a hearing on the proposed budget at 2:30 p.m. May 17 at its headquarters, One Gateway Plaza, next to Union Station in downtown Los Angeles.
The Board of Directors is expected to approve a budget May 25.