Despite a $249 million, 4-year deficit, the BART Board of Directors rejected a 10% across-the-board fare hike saying that the burden for solving the deficit should fall most heavily on reducing costs.
At a May 28th meeting, board members said two-thirds of the solution will be from reducing labor and non-labor related expenses. However they did approve several modest fare increases along with expansion of parking fees:
- Increased fares 6.1% effective July 1, 2009 (this CPI-based fare increase was previously scheduled for January 2010)
- Increased lowest priced fare from $1.50 to $1.75
- Raised the surcharge on trips to and from San Francisco International Airport from $1.50 to $4.00
- Expanded the $1/day parking program to 8 more stations (South Hayward, Bay Fair, San Leandro, Richmond, El Cerrito del Norte, Pittsburg/Bay Point, Concord and Pleasant Hill).
“The idea of a 10% across-the-board fare increase didn’t sit well with most board members because it put too much of a financial strain on our regular commuters,” BART Board President Thomas Blalock said. “We wanted to find a way to raise revenues without over burdening our loyal customers. Our riders already knew that our fares go up every other year by the cost of living – we simply accelerated the date on which the fares would normally go up by six months. We also raised our lowest priced fare to be less than or in line with the cash fare of other Bay Area transit agencies.”
“We decided on a $2.50 increase on the SFO surcharge because it allows us to raise much needed revenues without impacting our regular riders,” BART Board Vice President James Fang said. Fang, who is the Board’s longest-serving member pointed out that only three percent of BART’s riders use the SFO Station and half of them are not regular riders, but tourists. “A BART ride from downtown San Francisco to the airport will go from $5.35 to $8.10 with the additional surcharge. However, that’s still a bargain when you consider the alternative such as a $35 cab ride or a $20 shuttle van ride.”
UNION NEGOTIATIONS NOW UNDERWAY
The struggling economy, lower ridership, the elimination of state funding assistance plus the continuing increase of cost of health care and pension benefits are the main reasons why BART faces a nearly $250 million deficit over the next four years.
The contracts with all five of BART’s unions expire on June 30, 2009. BART is meeting with union representatives and has presented them with a shopping list of options with a target of $100 million in cuts as the employees’ fair share of the overall budget problem. The agency is asking for both union and non-union employees to pick up more of the cost of their benefits and pensions so riders and taxpayers don’t have to. In addition, BART proposed to eliminate contract language that limits the agency’s right to improve productivity by changing outdated, wasteful work rules.
“Our employees do a great job delivering BART service and we compensate them well for that,” Blalock said. “However, it would be unfair to overburden our riders with steep fare hikes but not ask our unions to cut labor costs, which our riders ultimately pay for.”
BART wants to cut $149 million of that budget through cost reductions. “Labor costs represent 73% of the operating budget,” BART General Manager Dorothy Dugger said. “Contract negotiations offer opportunities to address difficult issues of controlling wage and benefit expenses, as well as productivity improvements.”