Metro Plans Unfair Fares?

In the past week, Saint Louis’ transit agency Metro has held meetings to discuss a proposed fare increase on Metrobus and Metrolink tickets. Some at those meetings cried foul, arguing that the increases are too much to bear. But not only are Metro fares heavily subsidized, the way Metro operates means that either fares or local taxes must increase to cover ever-rising costs, as the testimony I submitted to Metro details.

Metro has proposed increasing fares on selected ticket options by approximately 10 percent, with the purpose of raising an extra $2.2 million in revenue. Metro’s strategy is to regularly increase fares by small amounts, rather than imposing infrequent large increases. But even this smaller increase has its opponents. As reported in the St. Louis Post-Dispatch, many have spoken out against raising fares. One attendee at a Tuesday hearing stated, “I agree with a partial raise, but not such a big jump on everything.”

The fact is that fares cover an extremely small percentage of Metro’s costs. In the last 20 years, total Metro fares ($746 million) have accounted for only 14 percent of the total costs of building and operating transit in the Saint Louis area ($5.5 billion). Even if one treats the generous grants of the federal government as manna from heaven, local taxpayers pay far more to fund Metro than fares contribute. For example, in 2012, fares ($49 million) made up only 22 percent of local operating funds ($217 million). The other 78 percent principally comes from taxpayers in the Saint Louis region, only 4 percent of whom use the system to get to work. While it is true more use transit occasionally, most residents of Saint Louis City and County rarely use Metro, if ever. With the federal government and local taxpayers paying so much of Metro’s costs, it is hard to argue that Metro users are being charged too much for their tickets.

To make matters worse, the percentage of operating costs that fares cover has been on a steady downward trajectory over the last two decades. In 1991, fares ($23 million) covered about 28 percent of local operating costs ($83 million) while today they only cover 22 percent. Increasing ticket revenue is not keeping up with the rising costs of operating, much less improving, the Metro transit system, as the chart below demonstrates.

We have written before about how Metro spends an inordinate amount of funds supplying near empty buses to far-flung areas of Saint Louis County. We also have written about the high cost of building and expanding the Metrolink. However, Metro officials feel they have a mandate to improve and expand those services, waste notwithstanding, which means ever-increasing capital and operating costs. Given those constraints, if Metro does not regularly increase fares, a higher and higher share of operating that improved system will fall on those who do not use it.