MTC committees review limited means-based fare proposal

Last Wednesday, the MTC Programming and Allocations Committee and Policy Advisory Council (PAC) reviewed a proposal for a regional means-based fare program with a narrow scope and an unfunded mandate for transit operators.

The Programming and Allocations Committee (a subset of board members), asked staff to bring back the item back with responses to their questions and comments.

The proposal recommends that five of the top seven transit operators (AC Transit, BART, Caltrain, Golden Gate, and SamTrans) offer their choice of a 20% or 50% fare discount for passengers with a household income less that twice the federal poverty level (which is  currently about $50,000 for a family of 4).   The other two large operators, SFMTA (Muni) and VTA are excluded because they already have low-income discount programs (VTA’s TAP pass program supports up to 1,000 customers, and plans to use Measure B funding to continue that program, assuming the lawsuit is resolved).

The program was described as a “required opt-in,” although the agency boards have not yet approved the program and would need to.  Participation would be optional for other, smaller agencies.

MTC estimated that the program would cost $16 Million if 20% of people who are eligible participate.  To pay for the discounts, MTC would provide $8 Million of funding from the SB1 gas tax, and agencies would need to cover the rest.  (If the ballot measure to repeal SB1 succeeds in November, the program is liable to be cancelled)

cost-estimates

Several commissioners wanted to see goals articulated for the program (increased transit ridership among low-income residents? adoption rate?), and to have the program assessed against the goals.

Commissioner Josefowitz expressed disappointment that the target was a modest 20% adoption rate – if the region wants to improve mobility for low-income residents, shouldn’t there be a stronger goal?

Commissioners including Josefowitz and Kim expressed disappointment that ideas proposed earlier, including integrated fares and/or a “pay-as-you-go” pass, had been taken off the table because these more comprehensive programs were seen as too difficult given our region’s fragmented transit system and currently antiquated Clipper technology.  They wanted to see a roadmap with more ambitious steps.

means-based

Without any fare integration, low-income riders who travel across counties are still paying more, and long, inter-county commutes are increasing as the region’s housing crisis displaces lower-income people to more distant locations.   Also, omitting smaller operators in the North Bay and Contra Costa County is leaving out places with a growing number of low-income residents who have been displaces from homes closer to the region’s core (see chart).

small-agencies-means-based

A “pay-as-you-go” pass (where the customer pays for each ride until they reach a daily or monthly maximum) was presented as an alternative to a means-based low-income fare, but they are not necessarily mutually exclusive.   A non-discounted “pay-as-you-go” pass could benefit customers whose income isn’t low enough to qualify for a discount (incomes between $50K and $100K), but who are cash-flow-constrained and price-sensitive in our high-cost region.

Several commissioners on the Programming and Allocations Committee expressed concern about the unfunded mandate for transit operators.  Agencies that have a more affluent customer base (such as Caltrain, whose fare structure already excludes low-income riders), might be drawn to increase fares, while agencies with a lower-income customer base might be drawn to cut service, potentially harming the customers the program seeks to help.  Moving forward with an assumption of low usage rates, without a known funding source, is a risk.

fares-and-income

Seattle paid for its low-income pass program with an overall fare increase, and Singapore is considering doing the same – before going ahead, both regions had public outreach verifying that the broader community would be willing to pay more to subsidize riders in need.   Bay Area customers might well agree – but we haven’t yet been asked.

Also, Seattle streamlined its fare system before adding a discount low-income fare. Research from SPUR is finding that around the world, regions that have streamlined fares tend to see an overall increase in ridership, with a positive-to-neutral effect on fare revenue.

The concerns of the Commissioners on the Programming and Allocations Committee were echoed by the Policy Advisory Committee (including, for disclosure, your blogger who has recently been appointed to the PAC).

What do you think? Should the region pursue means-based fares for low-income riders? Should the region continue to pursue and not give up on goals to streamline fares?  Should the program move ahead with an assumption of low usage and without a funding source that could cover higher usage? What other thoughts do you have about this topic?