A sharp decline in retail sales tax collections is putting the brakes on Spokane Transit Authority spending, and officials at the agency said a fare increase will be considered next year as part of their overall budget deliberations.
Retail sales have dropped 3 percent in 2008, and the agency is expecting another 3.5 percent drop in 2009, a significant budget problem because more than 70 percent of STA’s funding comes from sales taxes in two-thirds of Spokane County.
But robust tax collections in 2006 and 2007 helped STA build a cash reserve that the agency plans to use to get through the current economic downturn, said Susan Meyer, STA’s chief executive officer.
A $79 million budget for 2009 calls for delaying purchases of some buses, postponing high-tech innovations and slightly reducing the number of jobs. It also would use $14.5 million from cash reserves of $59 million, a fund that is used in part for bus purchases and facility improvements.
The agency had hoped to hire 12 more workers, but those plans are on hold.
“We are just hanging tight,” Meyer said.
At the same time, the agency’s citizen advisory committee is expected to come up with ideas for possible fare increases in late 2009 or 2010, but the committee would take its fare-increase suggestions to the public to gauge the reaction of riders before any action is taken by the STA board. The advisory committee is expected to call for a 25-cent increase in adult cash fares and proportional increases in passes and other fare programs.
STA charges $1 for adults for a one-way ride while many other transit agencies charge $1.50 or more, officials said. Fares in Spokane were last increased in 2002.
Meyer said the fare recommendations are expected to be detailed during the STA board’s meeting Dec. 18. Budget adoption is planned for the meeting, too.
The budget drops plans for expansion of routes, including improved service to Liberty Lake and Spokane International Airport.
However, renovation of the STA Plaza to concentrate bus operations on the first floor could continue as proposed, with work on the $2.5 million project beginning in 2010 if the STA board approves.
STA is also seeking 10 new vehicles for its van pool commuter service, which has seen higher demand in recent years.
The combination of higher ridership and falling tax revenues has left STA with a dilemma. If the economy does not improve, the agency will run out of cash in about 2012 even with a fare increase. At that point, it would be looking at possible route or frequency reductions in the face of higher demand for seats and routes.
Despite the sagging economy and falling gas prices, STA ridership continued to grow last month. Boardings through November were up 19 percent for the year in Spokane compared with 8.7 percent ridership growth in similar-sized communities across the country, Meyer said.
Lower fuel prices are a bright spot in the overall budget, she said.