Island Transit plans to stay fare-free
August 6, 2008 · 1:11 AM
Rising diesel costs dent budget
After more than 20 years of being fare free, is it time to end the free ride on Island Transit?
The fuel price crisis is making it expensive to fill up those four-wheeled behemoths as they make their way up and down Whidbey Island. As a result, some local officials say the agency should consider charging riders, though Island Transit leaders argue that’s a bad idea.
Oak Harbor Mayor Jim Slowik, a former representative for the city on the Island Transit board, said a ridership fee makes sense nowadays.
“I do think Island Transit should charge a fare. I think with costs of fuel and their need of a new office facility that charging fares might be a way to get an income,” Slowik said. He had hoped Island Transit could speak with Skagit Transit about their method of charging fares.
Oak Harbor City Councilmember Rick Almberg is in accordance.
“They run a good show and provide a good service, so they should charge fares,” Almberg said. “It was a good marketing strategy to have it free, but why should Island Transit be any different from other transits around here that do charge?”
But Martha Rose, executive director of Island Transit, said the move still doesn’t make sense financially.
“We have given charging fares thought but we hold the same position we always have: We would not get any usable revenue from it,” said Rose.
“We’ve prided ourselves on being one of the few fare-free transits and we think we’re successful,” said Bob Clay, Island Transit board chairman.
Island Transit is funded by a 0.06 percent local sales tax. In May, this brought in approximately $456,000. There is no income from fares to add to the fuel budget, so taxes and grants make up 100 percent of the agency’s income.
In comparison, Community Transit in Snohomish County receives 70 percent of its operating costs from a 0.09 percent sales tax and Skagit Transit receives funding from a 0.02 percent sales tax, which they hope to increase to 0.04 percent in January. Both obtain added revenue from charging fares.
The ceiling for sales tax that transits can receive is 0.09 percent. Increasing the sales tax to that “would give us quite a bit more usable revenue,” said Rose. However, it’s a long process and ultimately it’s up to the voters.
One year ago, Island Transit paid $2.26 per gallon of diesel fuel. Now, the cost is $4.01 per gallon. This is less than the regular price of diesel because Island Transit has exemptions from certain taxes.
“We keep a big pocket of money in the fuel line,” said Rose. But despite fuel’s budget priority, the money gets harder to stretch every year.
Island Transit expects to pay $2 million for fuel this year as opposed to $1 million last year. Of their overall operating budget, 20 percent goes toward fuel.
“If we’re not smart enough to put aside enough money to cope with what’s going on in the world, then we shouldn’t be running this operation,” Rose said.
Rising fuel prices may be more costly for Island Transit, but riders are flocking to buses to save their own cash.
“Demand is going out of the roof,” Rose said.
In May 2007, ridership was 90,050, but by June 2008, that figure soared to more than 120,000 riders.
Island Transit is working to reduce overloading on buses, but they don’t have enough space or maintenance to add new routes or buses on a whim. However, they are adding some new buses. Five small, 10 medium, and two heavy-duty buses were ordered. They were supposed to arrive a few months ago, but the manufacturer went on strike, so the medium buses aren’t due to arrive until November or December. Rose said the strike is over now.
Charging fares may sounds like the white knight needed to bail out Island Transit’s fuel budget, but it may not work that way.
“There’s a cost with charging fares,” said Martin Munguia, public information officer for Community Transit, where the adult passenger fare is $1.25.
Island Transit officials argue that collecting fares creates new issues. Fare boxes must be purchased and drivers must be trained to collect fares. Someone has to organize the fare boxes at the end of the day and sort money from transfers and compute these. Marketing must be paid for.
For a larger transit service like Community Transit in a populous area, those aren’t huge concerns. It costs less than one-half of one percent of the money gained to pay for collecting it, so “it more than pays for itself,” said Munguia.
However, Island Transit is much smaller. Rose said past federal studies on Island Transit have shown that they would be lucky to be able to use one percent of fare money collected. That’s hardly enough to drive one bus from Oak Harbor to Clinton once.
“We think it would cost more money to provide all the personnel and fare boxes than we would gain in revenue. We’ve seen this happen with other transits and we think this is an argument that holds water,” said Clay.
For riders who haven’t had to deal with fares, it would be a culture change, said Munguia, and it could impede the rapid growth in users.
“We don’t want to create barriers for riding the bus,” Rose said.
Buses keep cars off the road, which decreases pollution, congestion and ferry lines. In this way, “everyone uses the bus,” Rose said.
Collecting fares is time-consuming. It also causes difficulties among low-income riders. When Skagit Transit started charging fares, they had a program of free passes for low income-riders, but when 58 percent of riders qualified, the program had to be abandoned.
“You don’t have a fare box to enter a library,” Rose said.
Community Transit had a 25-cent fare increase in 2005 and is proposing another this year. In general, a formula says that three percent of riders will discontinue riding with each fare increase, according to Munguia. However, after the 2005 fare increase, ridership increased by nine percent that year.
“Gas prices are so high that there’s no cheaper alternative,” said Munguia.
Skagit Transit, which serves areas around Anacortes and Burlington, started charging fares in May 2001 because of the passing of Initiative 695, which took away half of the operating revenue. Instead of asking for a tax increase, riders suggested they help shoulder the load by paying fares.
Regular fare is now 75 cents. When the fare was added, Skagit Transit experienced a drastic drop in ridership as the 95,000 riders per month fell to 36,000 per month, according to Dennis Digges, operations director.
“It’s not all a bad thing,” Digges said, because youth stopped riding as much, making room for more working commuters.
For Community Transit, nine percent of the total ridership is young people. Community Transit encourages youth to ride the bus as a safer alternative to friends driving, especially during the summers.
Rose said young people aren’t always the problem-causers for Island Transit. For those who are, Island Transit has programs to talk with troublemakers and their parents and suspend the rider for a time. This includes suspending students who skip school to ride the bus elsewhere.
“We have some problems, but we deal with them very well. We’re very fair,” said Rose.
People have been calling to ask if they can make donations to Island Transit. This would eliminate the costs of charging fares.
“I would love to see us set up a donation process and get more usable revenue than people who charge fares,” said Rose.
The donations would be deposited directly into a bank, which would yield usable revenue.
But ultimately, it looks like Island Transit won’t be joining the fare-charging group anytime soon.
“Whether the cost of fuel rises or not the philosophy is the same: We won’t get usable revenue,” said Rose.
For more information on Island Transit, visit www.islandtransit.org.