March 5, 2010

Analysts concerned transit doesn’t have enough money

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By Andy Rosen
Andy@MarylandReporter.com

The Maryland Transit Administration may not have enough money for personnel and operations in next year’s budget, legislative analysts warn, but state transit officials insist that they’ll make do with the funding the governor gave them.

Transportation Secretary Beverly Swaim-Staley told the Senate budget committee Thursday that fiscal 2011 will be challenging under Gov. Martin O’Malley’s proposed budget, but she vowed to make it work.

“We have to move things around in the budget, or look at the capital program to meet our needs,” she said.

The Department of Legislative Services raised concerns in its analysis of the MTA’s proposed $468 million budget that projected costs of labor contracts could outpace the agency’s funding next year. The document pointed specifically to ongoing negotiations with transit unions.

“There is concern that the fiscal 2011 allowance for MTA is insufficient to support all of the contract increases for services and union personnel expenses in addition to the ongoing expenses of operating a large transit system,” the analysis said.

Swaim-Staley acknowledged that the union negotiations are a budget risk, but Ralign Wells, the newly-installed MTA head, pointed out that the agency had successfully dealt with $8 million in reductions last year. He said the MTA actually increased service 3 percent.

“These haven’t been easily done,” he said. “However we were able to accomplish that with very little impact on service on the street.”

Lawmakers asked about declining farebox recovery rates at the MTA. Recovery rates measure how much passengers pay toward the cost of operating a transit line.

According to the analysis, recovery rates in the Baltimore area have hovered around 30 percent, but have declined since 2006 when they exceeded 33 percent. MARC train cost recovery fell from 53 to 44 percent in 2009.

The state’s goal is 35 percent, but was once set at 50 percent.

Transit cost recovery is generally an issue between urban and rural lawmakers, because transit reaches many more people in densely populated areas. An alternative Republican budget proposed last week by Sen. David Brinkley, Frederick, and E.J. Pipkin, Upper Shore, proposes to return to a 50 percent recovery rate to bring in more revenues.

“That’s part of the problem with some parts of the state,” said Sen. James “Ed” DeGrange, D-Anne Arundel. “They don’t get the advantages of the use of transit, and money’s not in highways that they can get around by vehicle.”

DeGrange heads the Senate subcommittee reviewing MTA spending. He said he would like to look at the potential effect of restricting the free fares that state employees now get.

Wells said it is unlikely that a transit system could ever recover 50 percent consistently without significant fare increases, which he says are not in the works.