FY 2006 Budget Update
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FY 2006 Budget Update
By Daniel Murphy - from the 5/05 Transfer
News that an additional $9.2 million was available to Muni, thanks to a higher than expected transfer from the city's general fund, set off a feeding frenzy; everyone had an idea how to spend it. Some wanted to use it to forestall the proposed fare increase; others wanted to offset proposed parking fine and fee increases; still others wanted the money used to prevent service cuts. By the end of the day, it seemed like everyone had a plan to spend the money twice over.
This is an extremely tight budget year for Muni. Costs—many of them, like spikes in health insurance and diesel fuel prices, beyond Muni's control—soared and revenues haven't kept pace. In its budget, Muni proposes to increase fares, raising an additional $13.1 million, and to increase parking fines, garage rates, and parking meter rates, raising $30.0 million. They also propose a service cut, saving $13.5 million. So an additional $9.2 million won't fully offset any of these.
Muni is under intense pressure from politicians to give back some of the parking fine and meter rate increases, which raise $7.6 million and $7.3 million respectively. On May 12th, in response to demands from supervisors for a lower parking fine increase, MTA proposed a compromise by which some parking fines and meter rates would increase by a smaller amount, raising an additional $25.4 million from parking rather than $30.0 million. The rest of the $9.2 million was applied to keeping owl service at present levels ($0.8 million), hiring some service critical personnel ($1.2 million), and filling gaps in service and maintenance in the current fiscal year ($2.7 million).
Obviously, we'd prefer to see no fare increases and no service cuts, but there's no realistic way to achieve that. Doing so would require raising nearly every parking ticket to $100; this might be defensible on policy grounds, but given the resistance to a $40 street cleaning ticket, we cannot imagine local officials signing on to $100. And there are good reasons to believe such an increase still wouldn't be enough.
Raising taxes is difficult too. Proposition 218 effectively precludes many sources of revenue for Muni, including the oft-proposed Downtown Transit Assessment District. Most proposals for tax increases raise relatively small amounts of revenue—less than $10 million per year—or face overwhelming obstacles. Most tax increases would require a vote of the people, too, which couldn't happen any sooner than November, meaning a tax increase, if approved, wouldn't be in effect for most of the coming fiscal year, which runs from July 2005 through June 2006. And, of course, there's no guarantee the public would approve such an increase.
Reasonable arguments can be made for preferring fare increases to service cuts or vice versa. But Rescue Muni strongly urges supervisors to approve the proposed parking fine and meter rate increases intact, or even to raise them above levels proposed by the MTA. Rescue Muni also urges that some of the $9.2 million be applied to offset deferred maintenance. Maintenance isn't sexy, but it's critical to system reliability to keep vehicles, overhead wires, and so on in good working order.
Muni faces a serious structural deficit which won't be resolved by one-time fixes; it's crucial that the city do as much as possible, in the long run, to shift the cost of parking and driving a private automobile in our city onto those who choose to do so. And Muni should prioritize programs to increase operational efficiency, like Bus Rapid Transit.
Most of all, it's important that this year's budget not be balanced with smoke and mirrors. $9.2 million isn't $57 million, and this year's budget demands hard choices. We hope the supervisors will make the right choice, and approve serious increases in parking fines and meter rates. It's time for supervisors who say they support transit to stand up for making automobile users—especially those who break the law—pay their fair share.
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