A bill recently introduced in the state House of Representatives calling for a requirement that state-subsidized transit agencies use money from their ridership fees to pay for operating expenses may impact lakes area public transit agencies like the Suburban Mobility Authority for Regional Transportation (SMART) and Highland/Milford Transportation.
Currently, public transportation systems such as SMART are supported with a combination of state, federal, and local funds under the state’s Comprehensive Transportation Fund (CTF).
The CTF supports operations and capital assistance for transit systems, the two publicly-owned marine passenger services, as well as transportation services throughout the state for targeted populations — seniors, persons with disabilities, and transportation to work for low-income individuals — and debt service on CTF bonds.
State Rep. Dave Agema (R-Grandville) has introduced House Bill (HB) 4023, which would amend Public Act (PA) 51 of 1951. According to Agema, the goal is to ensure these public transit agencies are operating as efficiently as possible and that the onus is on them to either streamline service or increase local millages rather than continually have the state subsidize operating expenses.
“There is no incentive (for) mass transit to be efficient,” Agema said. “Most of these agencies are state-subsidized between 85-99 percent from the Comprehensive Transportation Fund. We won’t touch what the locals want to do, but the agencies must take 20 percent from their fares to support operating expenses and we will take money away until they become more efficient.”
Milford Village Treasurer/Finance Director Becky Jacques said she doesn’t question Agema’s motives behind the legislation, but the means to the end.
“Why must we target rider fares? Why not just say we have to come up with 20 percent, period?” Jacques asked. “Our seniors are living on Social Security so we try to keep rider fares low. This could hurt our program.”
Jacques said that 16 percent of operating expenditures cover rider fares.
“We not only get state funding, but (Community Development) Block Grants and money through fundraising and donations, which should be recognized,” Jacques said.
The proposed legislation would require that beginning after Sept. 30, the Michigan Department of Transportation (MDOT) ensures that each eligible authority and eligible governmental agency receiving dollars from the CTF for operating expenses is receiving at least 20 percent of eligible operating expenses from ridership fees and must submit documentation proving that. If it is determined the agency in question is not using 20 percent of ridership fees for operating expenses, MDOT would be required to reduce CTF funding for the transit program.
“That means that if the agency reports 18 percent (of rider fares are) being used for operating expenses, they we will take 2 percent to get to that 20 percent by reducing state funding,” Agema said. “They can ask locals for a tax increase in their millage. That’s up to them, but right now there is no incentive.”
Agema said that transit agencies like the “Rapid” in Grand Rapids is 85-percent state-subsidized, yet runs the service every half hour despite low ridership. Similarly, the Detroit’s People Mover is 95-percent state-subsidized and charges only 50 cents for rider fares, he said.
“They say that if they charge $1 they might lose ridership,” Agema said. “Well, otherwise shut it down if it continually loses money. This legislation forces them to be efficient and streamline services.”
SMART provides fixed route and connector service, American with Disabilities Act Paratransit Service and conducts a Community Partnership Program. Walled Lake and West Bloomfield are the only lakes area communities that collect a millage to fund transit services in their jurisdictions.
Highland/Milford Transportation, including the Ride with Pride program, conveys seniors and the disabled to destinations as their primary means of transportation. Between 350 and 400 people use the service, according to Jacques.