At the beginning of July, Capital Metro released two sets of data: one showing huge growth in revenue, and the other showing that ridership is declining in spite of that increased revenue.
The first data set was the CapMetro budget for fiscal year 2015, released with big fanfare and a presentation. CapMetro says their finances are excellent: Austin’s booming economy has generated increasing amounts of sales tax revenue for the transit agency. The agency expects to have operating revenues of $279 million, a 39% increase over 2010. Of that $279 million, the operating budget will increase to roughly $245 million from $220 million this year; $7 million will go to a specific reserve fund, and CapMetro will keep an extra $30 million on hand. The capital budget is also flush, with nearly $80 million in capital improvements planned for 2016. Capital Metro proposes to spend this money at about 2:1 ratio in favor of rail to bus. Bus improvements principally include replacing old buses; the rail improvements include additional rail cars, double track in some places, and expanding the downtown train stop. Finally, CapMetro has already refilled its coffers and expects to have $143 million in reserve.
The second set of numbers is ridership numbers for Spring 2015, reflected in the chart above. This data was not trumpeted by a press release, but was instead revealed by a citizen public information request. (Indeed, they didn’t even make it into Statesman’s article on the budget presentation.) The new ridership numbers show a significant decline across the entire system from Spring 2014. 11 of 16 local routes lost 10% or more of their ridership; every crosstown route declined in ridership, including 4 by more than 10%. The MetroRapid routes, which increased in hours and prominence, gained some of that lost ridership back, but overall the bus system carried 117,000 riders per weekday in Spring 2014, and 106,000 riders per weekday in Spring 2015.
Capital Metro’s ridership numbers and their budget are intimately connected. The budget decides both the cost and the level of service, which determine who can ride the bus. On the first count, CapMetro raised fares again, from $2.00 to $2.50 for a day pass, which is probably the immediate cause of the decline in ridership. The fare hike is motivated by arbitrary goals rather than financial sense: a state audit recommended that the agency increase fare box recovery ratio—the percentage of operating revenue raised from passenger fares—to .18 from about .10. However, the hike is not necessary from a financial standpoint. The raise in fares is projected to generate only $1,000,000 more in fiscal year 2015 than in fiscal year 2014. One million dollars is a lot, but it’s less than one half of one percent of CapMetro’s total operating budget and just the money left over in 2016’s budget could replace the fare increase for 30 years.
Capital Metro is expanding bus service, mostly by introducing new, better frequencies on the 7, 20, 300, 325, and 331. Together with MetroRapid, there will be 1.1 million bus hours of service in fiscal year 2016. This is a record high, but only 8% more than the number of hours provided in 2010 at the depth of the recession. Revenue since then has expanded by 39% in the same time.
Moreover, while there is a crisis in bus ridership, the budget is prioritizing improvements to the Red Line rather than upgrading the bus system. MetroRail provides less than 2% of Capital Metro’s daily ridership, but is getting almost twice as much for capital improvements as the bus system, which provides 80% of the ridership. New track is good, but not when buses are hurting. The fiscal year 2015 budget only allocated $125,000 to bus shelters. Other bus capital improvements that could be funded and that other cities have used, such as a transit smart card, and other off-board fare collections, have not been discussed.
It’s understandable why the transit agency wants to maintain a strong reserve: sales tax revenue has been very volatile over the last ten years. But that shouldn’t stop CapMetro from focusing on its core mission: being the best transit agency it can for as many Austinites and other central Texans as possible.
Therefore: CapMetro should prioritize ridership and mobility over fare box recovery. Reorienting priorities in this way can help collect more fares as more people ride, and focus CapMetro on the most productive ways to use its revenue to increase mobility within its budget constraints. The simplest way to do that is to focus improvement spending where the demand for service is. Lately, that’s not the Red Line, it’s our bus network.