Miami needs to make hard choice on trolley service now
Written by Michael Lewis on December 24, 2013
Miami’s trolleys, like most mass transit, lose money. The more riders, routes and amenities, the more the system loses. Not a good business model.
But commissioners never planned for a deficit.
Operating funds come from a countywide sales surtax, 20% of which 34 municipalities divvy up. With that bonanza, commissioners decided to make the trolleys free when they began rolling in April 2012. That meant costs couldn’t exceed surtax funds used.
But somehow, as the city added trolleys, routes, hours and such amenities as an app for real-time reports of when trolleys will arrive, costs got out of hand. Commissioners just approved advertising on the sides of trolleys to get $425,000 a year to plug part of the gap between costs and transit surtax funding.
That’s wrong for several reasons.
First, people ride trolleys because they don’t look like buses, although all they are is modified buses with an old-timey look that lures folks who wouldn’t be caught dead on a bus. The more ads, the more trolleys look like buses. Commissioner Francis Suarez suggested tracking to see if ads deter riders, which they well might.
Second, even with ads, the system’s planned $2,785,000 revenue will fall more than $1 million short of costs, with no plan to fill the gap.
Based on figures already several months old, the system costs a bit more than $3 per passenger to run. The shortfall is about 80 cents a ride.
You might ask, “So why not charge for the rides – 80 cents to break even or $1 to be safe?”
One reason might be that 105,000 rides a month as of June could shrink fast if a user had to pay. Transit isn’t worth much in the mind of anyone who’s been riding free for 20 months – which is why the trolley never should have been free.
People value free things less than if everyone pays. That’s why the county would have trouble restoring a Metromover fare it deleted when the transportation surtax passed.
Now that the city has set up a public utility, however, what to do about it?
Frank Carollo, a commissioner who said two weeks ago “I was adamant they be free,” now admits the city must look for cost reductions and efficiencies.
But nobody at the Dec. 12 meeting suggested any cuts or efficiencies as the trolleys roll on and the deficit rolls up.
When will a drive for efficiencies start?
Will it mean cutting routes, or trolleys, or frequency? Any of those could eat into ridership, which means that while total costs might fall, the true cost for each passenger would rise well above the $3.
At what point would it cost less to forget the trolleys and pay taxi fare for every rider?
The city can, of course, assume that sales surtax income will rise to cover the gap. In October the overseeing Citizens’ Independent Transportation Trust reported 44 straight months of gains, with 20% of the gain for municipalities.
But the most recent gain, a healthy 6.5%, would barely dent the city’s deficit. If the city put the same share of its surtaxes into trolleys, that would add just $153,400 next year – and even if the city adds no routes or frequency, costs will also rise to eat up most of that gain.
Continued surtax revenue is also endangered. Voters in 2002 were taken for a ride about what the revenue could support – the biggest promises for new rail lines could never be kept. In 2009 some tried to kill the tax. And backers of libraries, colleges and universities all covet sales tax support.
How many sales tax add-ons will voters pay?
If the city really values trolleys, other routes might appeal.
One is to shift more present surtax income from roads and sidewalks into trolleys. Commissioners could make that decision on their own.
A far more difficult move would be to dip into general funds and cut elsewhere – painful, but that’s the kind of hard decision we elect commissioners to make.
No choice is easy. We’ve long favored even a nominal fare so that users value the trolley. Dropping a quarter into a fare box would fill almost a third of the deficit. That would have been easier on day one than today, but it’s not impossible.
If customers pay even a dime, as more trolley seats fill without adding service at least the deficit would keep shrinking.
No, none of these choices is easy. Easiest is to simply let the deficit balloon and become part of the city’s annual budget crisis.
The hard choices, however, include the correct one – or, at least, a choice that makes economic rather than just political sense.
No matter how much anyone likes trolleys, the city needs to fund them fully, cut service way back or eliminate it. Period.
And that has to happen now. The commission has found a problem – at least, Mr. Carollo has pinpointed it. He needs to put it on the agenda and fight for the votes to solve it.
Like the trolleys, a solution must run on a tight schedule and follow a route that can get the city where it needs to go.