Sacramento Regional Transit officials on Thursday proposed raising bus and rail fares roughly 20 percent in two steps over the next year in an effort to pull the agency out of its financial tailspin.
The first increase would come in July, followed by another increase in July 2017.
The proposal, which will be brought to the RT board of directors Monday for consideration, reflects the agency’s self-acknowledged “dire” financial situation.
With dwindling ridership and higher costs, RT has had to dip into its reserves in each of the last two years to cover costs. Agency officials say if they don’t increase fares, they will exhaust their reserve account this summer, and won’t be able to balance future budgets.
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RT General Manager Mike Wiley said he’s proposing the incremental approach to ease the pain for riders.
The price for a basic single-fare ticket would go from $2.50 to $2.75 in July, and then to $3. The proposal includes increasing the price of daily passes from $6 to $7 and then to $7.50. Monthly passes would increase from $100 to $110, and then to $120.
Discount passes for students, seniors and disabled riders would be increased similarly. The “super senior” monthly pass, for people age 75 and older, would increase from $40 to $45 in two steps.
Notably, the Paratransit service monthly pass for seniors and disabled riders also would increase, but only once, from $125 to $150. Earlier this year, RT officials had proposed eliminating that pass altogether, but backed off after numerous protests. To save the agency money, though, Wiley said he’s proposing to limit use of Paratransit to 44 rides a month. Paratransit service, where buses take qualifying riders from their front door to their destination, costs RT considerably more to deliver than regular “fixed route” service.
“What you see here is a response to rider comments,” Wiley said. “We are trying to balance public feedback, along with (RT’s) financial situation.”
There is not so much an opposition to increases, but how we do it. A hard discussion. Fundamentally, the board has to have a balanced budget.”
Board chairman Jay Schenirer
The new proposal represents a modest change from controversial increases RT officials brought to the board in January. At that time, officials proposed an average 20 percent fare hike – to take effect all at once on July 1. Numerous community members, including representatives of the poor and disabled, decried that proposal, saying it was too much, too fast.
A majority of RT board members in January, including Chairman Jay Schenirer, said they could not support such a dramatic increase, and instructed Wiley’s staff to come back this month with other options.
Schenirer reiterated on Thursday that fare increases are necessary, likely in increments over time.
“There is not so much an opposition to increases, but how we do it,” he said. “A hard discussion, hard decisions. Fundamentally, the board has to have a balanced budget.”
Rider Regina Brink of south Sacramento, who is totally blind, opposed the plan to limit the number of Paratransit bus rides per month.
“If you’re in a wheelchair and that is your only transportation, then 44 rides just gets you to and from work,” she said. “That doesn’t include going to the doctor, getting your groceries. If you do dialysis, that is three times a week, to and from. It is not realistic.”
The fare increases likely would make RT’s base fares among the highest in the country. A recent RT survey of 10 similar-sized transit agencies showed that RT already has the second-highest basic fare, and would be the highest if it raises fares in July.
Wiley, though, argued that a straight comparison of base fares isn’t accurate. He pointed out that other agencies charge some riders a series of incrementally higher base fares for premium service, such as longer-distance rides and for express buses, making their average costs to riders higher than RT’s in some cases.
RT officials say their analysis shows ridership could drop by 1.3 million rides after increases, as some riders opt to use cars instead. But a staff analysis shows the agency should see its revenue increase 7 percent from the July boost in fares, and 5 percent the following year, enough for the agency to project that it will balance its budget and begin to slowly rebuild its reserves.
Wiley said the agency has been working on various other ways to increase revenue, such as selling carbon credits.
RT announced on Wednesday it also will hire 30 new fare inspectors this spring to crack down on fare evasion on light-rail trains. The move, RT security chief Norm Leong said, could help the agency increase fare revenue and make trains feel safer by eliminating nonpaying riders who sometimes engage in nuisance behavior.
Agency officials said that move would be cost-neutral. RT intends to fill some of the jobs via existing vacancies, and to reduce its private security contract by $1.2 million annually.
“We’ve heard for years that people feel uncomfortable,” Wiley said. “We are taking a proactive step to address that. The new fare agents will have a very positive impact.”
Wiley said the move is part of a strategy that will allow the agency to attract more riders by improving service quality, rather than expanding service. He said the agency is unlikely to expand service this year or next year, other than to add more trains and run them later on nights when the new downtown arena opens this fall.