Santa Clara VTA Riders Union

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TRANSIT MEDICINE: A Modest Proposal for Increasing Ridership and Revenue To Resolve VTA's Financial Woes


Gladwyn D'Souza of Walk San Jose originally presented our proposal to increase VTA bus and light rail ridership and increase transit revenue to the VTA Board and County Supervisors at a special VTA Workshop the morning of April 18, 2002. Our plan - revised slightly to reflect VTA's ongoing fiscal crisis and proposed solutions - is presented below. This revision was presented again to the VTA's ad-hoc Financial Stability Committee on February 5, 2003.

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Table of Contents

Introduction
Defining The Problem
Fare Box and Revenue Collection
Transit Operations
Marketing
Capital Projects
Administration and Policy
Conclusion


Introduction

About the Santa Clara VTA Riders Union

The Santa Clara VTA Riders Union (SCVTARU) was founded in October 2000 to address to elected officials in Santa Clara County the need to provide frequent, cost-effective mass transportation in the county, as well as the Bay Area region. SCVTARU is also open to working with transit staff and elected officials to achieve this goal. SCVTARU is a grassroots-based organization that shares no affiliation with the Santa Clara Valley Transportation Authority (VTA) whatsoever. Information on our group can be found online at www.vtaridersunion.org.

Purpose Of This Report

The purpose of this report is to provide short-term and long-term solutions to VTA's fiscal crisis, and thus gain financial stability. Many of these solutions have been implemented in the transit agencies of larger cities in the United States to sustain financial stability and maintain quality transit services – even during lean economic times.

To assist in the creation of this report, the Santa Clara VTA Riders Union obtained input via the following means:

As a result of the input we received, this report provides a front-line perspective as to the VTA's fiscal troubles, and ways to resolve the issues and attain financial stability without further service reductions and more fare increases. SCVTARU feels that the best solutions for saving money come from those who utilize the transit system daily (passengers), and those who help keep it running daily (operators, mechanics, and their supervisors). Hence, a common sense approach was taken in terms of how information from this report was gathered, and how the information in this report will be presented.

This report is divided into six (6) sections, to enable easier reading of our report. Each section of our report presents short-term and long-term solutions in a clear manner.

Defining The Problem

The Budget Deficit and Its Results

Currently, the Santa Clara Valley Transportation Authority (VTA) is facing a $6 billion deficit over the next twenty years. Since the current economic recession started in the fall of 2000, VTA transit services has been reduced by nearly 20%. On February 6, 2003, the VTA's Board of Directors approved a 9% service reduction effective April 14. As of this writing, the current deficit is $70 million. According to Scott Buhrer, the Chief Financial Officer of VTA, the system will technically become bankrupt on June 30, 2003.

A Truly Taxing Transit System

Santa Clara County's transit system has historically depended on sales tax revenue for its basic funding. Since voters passed a permanent half-cent sales tax to provide funding for the county's transit system in 1975, voters have approved sales tax measures in 1984, 1992, 1996, and 2000 for the purpose of improving the county's transit and roads infrastructure. (Note: the 1992 vote was voided by the California State Supreme Court for failing to meet the 2/3 majority needed for special taxes.) According to the VTA's 2003 Fiscal Year budget, 80% of VTA's operating revenue comes from a combination of the 1975 local half-cent tax and a quarter-cent tax collected by the State of California.

However, local sales tax measures for transportation approved by voters since 1975 emphasized capital (construction) projects. These tax measures failed to adequately account for funding to run and maintain the projects (i.e. Operations) during their full lifetime. A prime example of this is 2000 Measure A. The ballot measure's text never mentioned where additional funding to operate any of the listed projects (the San Jose BART extension, light rail into East San Jose, zero-emission buses) would come from. The $1.1 billion in operating funds from 2000 Measure A would only address 17% of the projected $6 billion shortfall over the next twenty years.

The 2000-2003 Recession and Its Contribution To the Problem

The economic recession that began in the fall of 2000 has created a drastic reduction in sales tax revenue. The VTA's 2003 Fiscal Year Budget stated how sales tax revenue during one quarter decreased by 25%. Because of the drastic decrease in sales tax revenue that the county's transit system needs to keep running, the VTA raised fares by 15% and reduced service by 5% on June 8, 2002. Seven months later, VTA staff has proposed to reduce bus and light rail service again, to avoid total bankruptcy by June 30, 2003. Currently, the VTA is facing a $6 billion transit operations shortfall over the next 20 years, as it tries to deliver to voters projects such as the San Jose BART extension and light rail expansion in East San Jose.

The Situation Gets Worse

The ideas proposed by VTA Staff in their Report on Obtaining Sustainable Financial Stability, combined with the recommendations in the Business Review Team report, make the situation worse. Proposals such as fare increases 10% every other year increase obstacles to mass transit for off-peak riders and discriminates against low-income riders in the form of higher fares. Proposals such as reducing paratransit service rob the disabled community of their independence and dignity. SCVTARU has not heard of one example from a transit agency in North America where fare increases and reduced service have lead to increased ridership and increased revenue.

Worse, with the passage of Measure B in November 2002, there will be at least $2 billion in state and federal discretionary funding that will be “locked in” to highway projects until the year 2036. This will result in mass transit continuing to depend on unstable sales tax revenue for funding, while highway expansion will receive stable, diverse funding.

Only Solutions

New revenue streams for transit operations must be identified immediately in order to maintain mass transit service in Santa Clara County as a viable alternative to driving. These revenue streams must help even the playing field between funding for transit projects and funding for highway expansion. This report will identify those additional streams the VTA will need to attain financial stability, and enable it to operate the transit projects it has promised voters without harming them with higher prices and/or reduced service.

Fare Box and Revenue Collection

Short Term Solutions

Long-Term Solutions

Transit Operations

Short Term Solutions

Long Term Solutions

Marketing

Short-Term Solutions

Long Term Solutions

Capital Projects

Short Term Solutions

Long Term Solutions

Administration and Policy

Short Term Solutions

Long Term Solutions

Conclusion

To Sum It Up...

It is well past time for the Santa Clara Valley Transportation Authority to move into the 21st Century in terms of service philosophy and transit operations funding. VTA's bus and light rail operations must move out of the “9 to 5 on weekdays” era of transit service, and into the era where current and potential transit riders have 24-hour, 7 day per week schedules. To continue a 1970's-era philosophy of solely depending on sales taxes for its operations budget is to guarantee financial ruin when a deep recession, such as the current one we are experiencing, affects transit revenue.

However, if the VTA is to become and remain financially stable, cities, educational institutions, and private employers within Santa Clara County must work together with VTA and abandon 1950's-era policies of encouraging the use of an automobile over mass transit. Specifically, cities such as Sunnyvale and Campbell need to emphasize the use of mass transit thru downtown areas as opposed to encouraging more traffic gridlock thru free parking garages in their respective downtown areas. Traffic is an inherent issue within Santa Clara County. Numerous surveys taken over the last few years reflect how the county has over 1 million solo drivers on local roads per day – amongst the highest in California. Local ordinances which discourage mass transit harm the environment and reduce the quality of our lives in the long term, resulting in the county becoming everything its citizens despise about Los Angeles in terms of consistent traffic gridlock.

The Santa Clara VTA Riders Union found it surprising that a transit agency such as VTA is lax in enforcing many of its fare collection policies. We estimate that the VTA can gain at least an additional 5% in fare box recovery simply by enforcing existing fare policies in a more aggressive manner.

With our ideas implemented, VTA buses and light rail will become a more viable alternative to driving in Santa Clara County. As a result, the quality of life issues in our current infrastructure will be mitigated. In the long term, our plan will best ensure that the goal of San Jose's General Plan of doubling transit trips by 2010 will be met. It will also ensure that transit operations funding will have revenue streams that will enable it to withstand volatile economic conditions without harming transit riders with higher fares and/or reduced service.


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