Tuesday, July 22, 2008

GM Burns' response to Scott Herhold's column

Last Sunday, the 2001 agreement between BART and VTA was brought up on Scott Herhold's column. One of the issues discussed is the lien BART will have on the TDA funds (a 1/4 sales tax collected by the state) that VTA currently spends on bus and light rail operation, if VTA cannot identify another funding source (a new tax) to operate the BART extension by 2009.

According to his column, some suggested that the tax is a way to fund VTA through the back door. They argued that VTA could still fund BART with its existing taxes by making VTA operate more efficiently.

Today, in an email message, VTA's GM Michael Burns shot back. Burns wrote that VTA is facing raising cost and that the federal government will never fund BART if VTA had to cut existing services.

There are some truths in what they said, but they are also wrong in some respects.

Rising fuel cost is impacting VTA's budget. Even with the growing ridership, it is hard to imagine that additional fare revenue will keep up with the increasing fuel expenses. At the same time, the state is cutting back funding to public transportation as it tries to resolve its budget deficit. VTA does not have the kind of reserve to fund BART.

At the same time, the 1/8 cent tax will not be able to fund BART without putting a substantial risk on existing bus and light rail operation. VTA has admitted that the 1/8 tax will not completely cover the upfront payment to BART. Also, if the extension fails to meet ridership projection (which it won't), VTA would have to pay more to BART on top of that upfront payment. Under such scenario, VTA not only would have an incentive to cut transit service to fund BART by reducing its expenses, but also by forcing its bus riders to pay more on BART.

In addition, VTA has yet to release an expenditure plan, which would provide clues as to how VTA could borrow enough funds to support a massive construction in downtown San Jose (especially given the construction timetable), along with other commitments like Caltrain, light rail and bus rapid transit throughout the county. Just talking about the operating cost is an attempt to whitewash the risks VTA would face. Will this be the last time VTA ask for a tax increase if it passes? Or will this be one of many times VTA ask taxpayers for a bailout?

No comments: