Proposed Fiscal Year 2013 Budget
Here’s the news release from Metro — the most newsworthy item, I think, is that the $4.5-billion budget does not propose raising fares for the 2013 fiscal year:
Metro will conduct a budget workshop and public hearing on a proposed $4.5 billion budget for Fiscal Year 2013 on Wednesday, May 16, at 2:30 p.m. in the third floor Board room at Metro Headquarters, One Gateway Plaza, Cesar Chavez & Vignes, next to Union Station in downtown Los Angeles.
The budget can be viewed online by clicking here. The public can view a copy of the balanced budget proposal at Metro.net. Request copies via e-mail at rmc@metro.net or by calling Charlene Williams in Metro Records Services at 213.922.2342.
Metro’s Board could consider adopting the budget for the fiscal year beginning July 1, 2012 at the board meeting that starts at 9 a.m. on Thursday, May 24, at Metro headquarters.
Metro CEO Art Leahy’s budget proposal, which is balanced with no shortfall, does not propose raising fares, which already rank among the lowest in the nation. Metro’s farebox recovery will stay at 28 percent, again near the bottom of any major operator, and passenger loads also will be low compared to our peers.
The proposed budget includes the following: $1.467 billion for transit operations, $278.5 million for deferred maintenance of Metro’s rolling stock of buses and trains, $1.084 billion for construction of Measure R transit projects, $134.5 million for other capital improvements, such as bus maintenance facilities, $236.5 million for a robust highway program; $339.5 million for debt service obligations and $974.7 million in subsidies distributed by Metro to fund Metrolink, regional operations and transit projects throughout Los Angeles County.
Against the backdrop of high gas prices, Metro will be offering commuters and others viable public transit alternatives with new light rail service on the Expo Line connecting downtown Los Angeles and Culver City and the Metro Orange Line busway extension to the Metrolink/Amtrak station in Chatsworth. Metro also will bolster express bus service on the Harbor Transitway and the I-10 between downtown and El Monte as the ExpressLanes congestion pricing demonstration project debuts
Highway projects include the I-405 Sepulveda Pass Improvements Project, the High Desert Corridor, the SR-710 north gap closure and the widening or other enhancements on various stretches of the I-5, I-605, I-710 south, and SR-138. Efforts will continue to construct sound walls and implement Metro’s freeway beautification program.
Metro CEO Art Leahy stressed a renewed focus on customer service with a strong emphasis on reliability, cleanliness and courtesy. Metro is purchasing hundreds of new buses and rail cars and catching up on years of deferred maintenance for Metro’s rolling stock. Stations will be cleaner, safer, and there will be better signage so that customers who speak a multitude of languages can better navigate the Metro system.
The proposed budget restricts hiring new employees except to fill positions needed to deliver Measure R projects and operate new services. Moreover, Metro has set in motion a program to recruit and train the next generation of managers and operations employees to allow for a smoother generational transition.
Metro funding comes largely from local transportation sales tax revenue along with transit assistance and grants from the state and federal governments, farebox revenue, and other revenue sources such as advertising, land leases and commercial filming.
The FY 13 budget is $337.3 million or 8.1 percent more than the current $4.178 billion Metro budget. This reflects a significant expansion of the Measure R program in the next fiscal year. In the new fiscal year Metro will be spending $1.560 billion on Measure R projects and programs compared to expenditures of $1.278 billion this fiscal year. In addition, Metro will be spending $35.2 million to operate the new Expo light rail line in FY 13.
Thanks to Measure R, the half-cent sales tax approved by voters in 2008, Metro is overseeing the largest public works program America has seen in decades. Projects underway and about to start construction are designed to stabilize and downsize the region’s worst traffic to manageable levels while generating hundreds of thousands of direct and indirect jobs, stimulating the economy, and improving air quality.
However, the reality is that Measure R does not include enough funds to support operations for all the new rail projects in the pipeline. A reduction in state or federal funding, or a dip in the local economy or ridership will endanger the balanced budget presented.
In terms of the proposed budget, Leahy said it’s prudent to flag these risks now so that Metro’s Board can avoid future roadblocks that could detour crucial progress in this decade. In that sense, FY 13 will be a pivotal period for Metro and Los Angeles County in more ways than one.
“This is because there are alternatives to public transit. And no, cars, buses, and trains are not the only way to get around this city.”
Transit elasticities are well-researched. Here is a review of literature from around the world.
http://www.vtpi.org/tranelas.pdf
Transit elasticities are generally inelastic and and transit-dependent riders are among the least elastic group.
“Or, would Metro gain enough shorter-distance riders to offset the potential loss of longer-distance riders now facing higher fares?”
Loss of longer-distance riders would probably be offset by better service directly related to increasing farebox recovery.
“Are there economic justice impediments?”
The correct answer to this is, “Who cares?” but you are correct, the BRU would flip out.
Sorry for all the posts, Mr. Hymon, but I found an old paper that advocates for distance-based fares.
http://www.uctc.net/papers/703.pdf
It’s from the UCLA Institute of Transportation Studies.
Eduardo,
Metro’s mission is largely to reduce congestion and pollution with the tax receipts given to it. It is not to provide transportation to you in every situation. Biking and walking are always cheaper than transit and Metro would be better off if a person chooses these modes because it meets the goals of their mission without them having to spend their limited tax dollars subsidizing you.
Take someone who lives in Avalon and works in Long Beach. He would buy a monthly pass if Metro would run a ferry. He thinks Metro should run the ferry because he pays taxes like everyone else in LA County even though it would cost Metro $1000 a month per person to subsidize this service. He thinks the Monthly passes should $50 instead of $75 or he is threatening to just kayak to work even if Metro runs the ferry because kayaking is basically free.
Based on your logic, you probably think Metro should run the ferry and reduce the monthly passes. You might feel differently if the cost of the ferry service and the pass reduction causes Metro to cut service in Inglewood.
Matt,
“Take someone who lives in Avalon and works in Long Beach.”
How many people living in Avalon actually do that on a daily basis? There are a lot more people living in LA proper who have shorter commutes than people going back and forth between Catalina Island and LB.
That’s pretty much like saying Metro should offer cheap $1.50 public transit service from LA to Vegas as well because I’m sure there’s gotta be someone who does that.
Frank M.
It is just an example that points out that transit is cannot serve everyone for all their tranport needs and Metro has to take into account both revenue and costs of providing service.
This person chooses to live in Avalon and by doing so is foregoing certain transit options just as someone who lives in LA proper may choose to live where they have to take 3-4 bus lines to travel to work vs. someone who lives near a Metro line and works downtown. Even with distance based fares, the former person is not going to have an attractive transit trip while the latter is.
As for your comment about Vegas, Avalon is in LA County while Vegas is not and would never be in Metro’s service area.
Matt,
“It is just an example that points out that transit is cannot serve everyone for all their tranport needs and Metro has to take into account both revenue and costs of providing service.”
No, what you’re doing is just trying to apply an unrealistic example to prove your point across.
“As for your comment about Vegas, Avalon is in LA County while Vegas is not and would never be in Metro’s service area.”
And yet somehow it makes sense to plan out to extend the Gold Line all the way to Ontario Airport, which is in San Bernardino County, so a person who wishes to go from Santa Monica to Ontario can do so for at a bargain of $1.50 while another person who only wants to go from Little Tokyo to Union Station also has to fork over $1.50 for an one station ride that’s less than a mile. Brilliant.
Frank M.
It is not an unrealistic example at all. Do you think people in Avalon never have to go to the mainland? They have to go for basic services like shopping, to see doctors other than a basic family practice doctor and so on.
As I said before, I am fine with distance based fares similar to DC and SF. Just realize you are going to have to have a base fare similar to $1.50 we have now or something even higher like DC and SF have. People on here are expecting distance based fares to mean 25 cents for a short trip and $1.50 for a longer trip. That is completely unrealistic and will not happen.
Matt,
And how often do 4000 residents of Avalon go to the mainland and how many Avalon residents actually have residences in the mainland as well for the purposes that you mentioned? They already have a 10 ride for $180 subsidy as well.
Unfortunately, most people relying on public transit and LA Metro don’t fit the “I own a private yacht/Cessna, and I own two homes one in the City of LA and the other in Avalon, and I split my times between the two every month” demographic.
And how would 25 cents for shorter rides not make any sense? A car that can fit four passengers that gets 20 mpg at $5.00/gal gas can cost less than $0.0625 per person to travel 1 mile. For all it’s worth, anybody with a car can make a quick buck and gas money while commuting by picking up passengers that are waiting for the bus and charge each passenger 10 cents per mile for it.
Frank M.
Where was I discussing two houses and where are you inferring this from? Avalon does not have many services that people require so yes they do go to the mainland. Since you have some prejudice against people who live in Avalon, you can apply the same concepts to people in Topanga or numerous communities in LA County. Some places simply will be difficult and expensive to provide transit to.
I have already stated on here how Metro will lose even more money by charging less money for services and this goes to the whole Avalon example as well. By not providing the ferry service, Metro is losing customers. However, by providing the service they would lose much more money. The same goes for 25 cent fares. Exact same concept….