One Question

This morning, as we mentioned in Fizz, the Seattle Times ran a story that included some stats cited by the conservative/libertarian Washington Policy Center that supposedly demonstrate that King County Metro doesn't need new tax revenues, and that, if anything, the transit agency is profligate.

The story (which didn't provide any context for this claim) cited the WPC's claim that operating costs for Metro increased by 83 percent between 2000 and 2012, while inflation only increased by 33 percent. The implication: Metro has frittered away an ever-increasing budget and just needs to cut costs, rather than asking for more tax dollars.

County voters will have the final say on whether to fully fund Metro with a new, $60 vehicle license fee and a 0.1 cent sales tax increase, or face major service cuts, on April 22.

In the meantime, we asked Dwight Dively, the head of the county budget office, whether the WPC's interpretation of the county's spending on Metro operations (raw data here) was accurate. 


The short answer: "Yes, but the way they're using the numbers is misleading." 

The longer answer: The WPC's claim about ever-growing Metro expenses ignores several key factors, including:

1) The fact that Metro's overall revenues plummeted during the recession;

2) The fact that King County made a number of major cost-cutting changes three years ago—including a pay freeze for workers, a reduction in health care costs, and a dip into Metro's financial reserves;

3) The fact that those cost-saving changes, in part, prompted the state legislature to give the county the authority to pass a $20 vehicle license fee to stave off cuts;

4) The fact that that license fee expires this year, forcing the county to come up with a funding alternative;

5) And the fact that the "operations costs" the WPC is counting include the cost to Metro of operating transit service for other agencies like Sound Transit, which reimburse King County for those costs. 

The recession alone drastically decreased the amount Metro collected in tax revenues—from a high of $442 million in 2007 to a mid-recession low of $376 million in 2010. Sales tax revenues didn't rebound to pre-recession levels, in fact, until 2013, when they ticked up slightly above $442 million again; that doesn't reflect inflation, though, which reduced the value of those revenues by 15 percent during those years. 

Although projections show revenues continuing to increase in the future (at least until the next recession), funding from the temporary two-year congestion reduction charge approved by the state legislature runs out this year.

Once there's another recession, of course—an event King County projected, completely theoretically, as occuring in 2018—even major cuts to service now (perhaps 15 percent, Dively says, as opposed to the 17 percent the county was projecting) won't be enough to prevent the need for more cuts in the future—even as bus ridership, if longstanding trends are any indication, continues to increase.

"The fact that revenue is now increasing again does not come close to addressing the loss of the congestion reduction charge," Dively says. Additionally, "besides inflation, Metro has increased service in that long period [between 2000 and 2012], so they're comparing apples to oranges." And finally, he adds, "If you look at Metro's 'costs,' they're providing all this service that Sound Transit is paying for, so it looks like a cost increase." 

Currently, Metro's fares—which have increased four times since 2008, with another increase coming this year—pay for a little under a third of its costs, with sales taxes (which Metro riders, as consumers, obviously pay) and the vehicle license fee making up most of the rest. 

Oh, and one other fact the WPC didn't mention: The April 22 Metro funding proposal will actually fund county roads as well—40 percent of the vehicle license fee and sales tax increase will go to road improvements and maintenance, because King County's current tax base (yep, including that gas tax conservatives love to complain is far too high) isn't enough to keep its roads from falling into disrepair. 


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