Aug. 1, 2008

Lower sales tax revenues prompt closer review of Metro fare proposals

Metro riders An unexpectedly sharp drop in sales tax revenues, a softening local economy and continued high fuel costs are sparking a closer review of a Metro Transit fare proposal currently before the Metropolitan King County Council. Sales tax revenues are Metro's primary source of funding.

New projections released this week by the King County Office of Management and Budget show Metro will lose $45 million in sales tax revenues in the 2008-2009 biennium and $43.5 million annually beginning in 2010 or about 8.3 percent less revenue than anticipated. This loss, combined with a projected $22 million in unanticipated costs due to rising fuel prices and other cost increases means Metro is facing an average annual budget shortfall of more than $70 million.

In an effort to preserve service, meet growing demand for transit and help pay for the spike in diesel fuel prices, Sims last month proposed a 25 cent increase in most adult fares. Fuel prices jumped 60 percent this year alone.

"The uncertain economy and high fuel and food costs have caused people to spend less money on items that are subject to the sales tax, which is the primary source of funding for Metro," said King County Executive Ron Sims. "Combined with the high fuel costs that everyone is paying, this drop in revenue creates a huge hole in Metro's budget.

"Despite this new sales tax forecast, we must do everything we can to deliver bus service to riders as they seek refuge from gas prices that have turned household budgets upside down," said Councilmember Dow Constantine, chair of the County Council's Transportation Committee. "Every available tool that Metro Transit has to keep the buses rolling must be on the table. That includes cutting costs, postponing investments, innovating to maximize service efficiency, and increasing fares."

"We are working with Dow to assess these new numbers before moving to increase fares," said Sims. "The department will continue to scrutinize its operation for savings and efficiencies as well as capital projects that can be deferred."

Sims and Constantine have agreed that the council should take more time to analyze Sims' proposed 25 cent fare increase in light of the new forecast.

The drop in sales tax comes at a time of historically high fuel prices and ridership. Metro is rated the fastest growing large bus transit agency in the nation and in May set a record for 400,000 riders per day.

Related information

Falling tax revenues hurting Metro Transit, Seattle Times
American Public Transportation Association
Annual savings from riding Metro instead of driving: $8,400, Seattle Times
Riding bus may save $8,400 a year, Seattle Post Intelligencer

King County Executive, Ron Sims County news Executive initiatives Excellence in Government Executive offices Biography Contact information King County Executive Office Ron Sims, King County Executive 701 Fifth Ave. Suite 3210 Seattle, WA 98104 Phone: 206-296-4040 Fax: 206-296-0194 TTY Relay: 711	KING COUNTY HOME \| NEWS \| SERVICES \| DIRECTORY \| CONTACT King County Executive, Ron Sims King County Executive You're in: King County Executive, Ron Sims print Aug. 1, 2008 Lower sales tax revenues prompt closer review of Metro fare proposals An unexpectedly sharp drop in sales tax revenues, a softening local economy and continued high fuel costs are sparking a closer review of a Metro Transit fare proposal currently before the Metropolitan King County Council. Sales tax revenues are Metro's primary source of funding. New projections released this week by the King County Office of Management and Budget show Metro will lose $45 million in sales tax revenues in the 2008-2009 biennium and $43.5 million annually beginning in 2010 or about 8.3 percent less revenue than anticipated. This loss, combined with a projected $22 million in unanticipated costs due to rising fuel prices and other cost increases means Metro is facing an average annual budget shortfall of more than $70 million. In an effort to preserve service, meet growing demand for transit and help pay for the spike in diesel fuel prices, Sims last month proposed a 25 cent increase in most adult fares. Fuel prices jumped 60 percent this year alone. "The uncertain economy and high fuel and food costs have caused people to spend less money on items that are subject to the sales tax, which is the primary source of funding for Metro," said King County Executive Ron Sims. "Combined with the high fuel costs that everyone is paying, this drop in revenue creates a huge hole in Metro's budget. "Despite this new sales tax forecast, we must do everything we can to deliver bus service to riders as they seek refuge from gas prices that have turned household budgets upside down," said Councilmember Dow Constantine, chair of the County Council's Transportation Committee. "Every available tool that Metro Transit has to keep the buses rolling must be on the table. That includes cutting costs, postponing investments, innovating to maximize service efficiency, and increasing fares." "We are working with Dow to assess these new numbers before moving to increase fares," said Sims. "The department will continue to scrutinize its operation for savings and efficiencies as well as capital projects that can be deferred." Sims and Constantine have agreed that the council should take more time to analyze Sims' proposed 25 cent fare increase in light of the new forecast. The drop in sales tax comes at a time of historically high fuel prices and ridership. Metro is rated the fastest growing large bus transit agency in the nation and in May set a record for 400,000 riders per day. Related information Falling tax revenues hurting Metro Transit, Seattle Times American Public Transportation Association Annual savings from riding Metro instead of driving: $8,400, Seattle Times Riding bus may save $8,400 a year, Seattle Post Intelligencer
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	Updated: Aug. 1, 2008