Barker said downtown business organizations are continuing to contribute funds to offset costs relating to TARC's two fare-free and frequent trolley service routes which will continue to operate without changes. In the coming year, Barker noted, TARC will use federal grant funds to add a new electronic fare collection system and 16 new clean-diesel buses to the fleet.
"We're a vital part of the community and people depend on us everyday to get to work, school, medical appointments and to access what life has to offer. For many people, we are their lifeline. We are going to do everything we can to continue to provide the best service possible," Barker said.
Four years ago, TARC raised its “base fare” to $1.50. This figure is somewhat deceptive, however, since the “average cash fare,” or the average amount collected from each customer is $.52. Average cash fare is lower than the base fare due to discount programs and discounted rides. Local government employees, for example, ride for free.
TARC is a little vague about what percentage of its operating costs comes from passenger fares. On their web page, they claim: “About 2/3 of the money to operate TARC comes from local, state and federal tax revenue and about 1/3 comes from fares paid by our customers.” In last year’s annual report, however, they state: “Fare revenues are projected to be 15% of the overall revenue and cover approximately 15% of the total operating costs of the service in fiscal year 2012.” Our computation indicates the true percentage is closer to 12%.
With a little effort, one can scan the various annual reports from TARC and learn that the average number of passenger trips is 16 million per year. With a total operating budget of $67 million, this computes to just over $4 per ride. If TARC collects, as they claim, 52 cents average cash fare per ride, then the fares are generating a little over $8 million per year; or about 12% of the cost of operating the bus service. We do the math, so you don’t have to.
The bulk of TARC’s funds comes from working people; generated by a percentage of the Jefferson County Occupational License Fee, which is a 2.2% tax that employees in Jefferson County pay. The occupational license tax rate is applicable to the “net profits” of business entities, independent contractors and self-employed individuals, and to the gross employee compensation of employed individuals. The occupational tax is imposed for the “privilege” of engaging in a business, profession, occupation, or trade within Louisville Metro, Kentucky, regardless of legal residence of the person so engaged.
The folks who have this License Fee (tax) deducted from their paychecks are paying $3.48 for each bus ride, and the rider is paying 52 cents. But this sharing of the wealth is not sufficient to satisfy the people over at TARC. In their most recent “long range plan,” the TARC planners call for a 100% increase in your bus taxes: “TARC anticipates that an increase in the occupational tax – from .2% to .4% of every dollar earned -- could generate approximately $40 million annually in local revenue dedicated to transit. This local investment in public transportation would provide TARC with stable, consistent funds for service expansion and provide the local matching funds that could leverage many sources of federal funds.”
So, even though a lot of folks are going to complain about paying a buck seventy-five for a bus ride, that’s still just a little less than half of what the ride really costs. Maybe the citizens and voters of Louisville should let the free market set the price: If a bus ride is really worth 4 bucks, then the riders should pay it. If it isn’t, they won’t.
In case you’re interested, TARC pays its beginning bus drivers $14.38 per hour. Experienced drivers can earn as much as $20.55 per hour. TARC Executive Director J. Barry Barker makes $170,763 annually.
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