How Well is the Bus System Working?

By Steve Harrison, The Charlotte Observer, N.C.

Aug. 19–How well is the bus system working?

–Opponents of light rail have rallied enough support to force a Nov. 6 vote on repealing the transit tax. Trains are a popular target, but the tax mostly pays for a beefed-up network of buses.

Steve Harrison

Voters deciding whether to repeal Mecklenburg’s half-cent transit tax often focus on light rail. But 65 percent of the money raised from the tax goes to fund the city’s bus system, which has grown significantly since voters approved the tax in 1998.

Charlotte Mayor Pat McCrory, a transit tax supporter, touts the success of buses and says the system faces deep cuts if the tax is repealed.

So what kind of bus system has the Charlotte Area Transit System built?

By one measure, the CATS expansion has been a success. Ridership is up 66 percent, or nearly 8 million new passenger trips, since 1998. Few transit systems nationwide can boast of such gains.

But growth has been costly. The bus system has become less efficient, and its operating budget, adjusted for inflation, has increased 170 percent since the tax was approved. One transit expert warns that if cost increases don’t slow, CATS risks operating a service that isn’t financially viable.

“You can’t have a cost structure that’s outgrowing your revenue structure,” said Steven Polzine of the Center for Urban Transportation Research at the University of South Florida.

CATS chief executive Ron Tober, who last week announced plans to retire Dec. 21, agrees the bus system has grown less efficient but called it an expected outcome of rapid growth.

“We put a lot of service out there. We put a lot of product on the street,” Tober said. “We are growing at a slower rate now, and we expect to see our performance improve.”

The Nov. 6 referendum will determine what kind of bus system Charlotte will have.

The system now is designed to serve riders without cars, but also to court the so-called “choice riders” — those who might be persuaded to leave their cars at home, often in the suburbs.

Brian Carreira, a recent bus convert, is typical of the “choice rider” CATS is pursuing.

His trip uptown on Route 62X from south Charlotte takes longer than driving, but he saves on gas and avoids parking costs at the BB&T building, where he works in commercial lending.

“I’ll talk to people on the bus who save between $1,800 and $2,400 a year,” said Carreira of Ballantyne, who uses a $70 monthly bus pass for express trips. That’s about $1.60 for a one-way trip.

Tober said he’s now getting more requests from commuters seeking later express buses home. He said that’s a sign of a “maturing bus system,” and that riders are starting to want, and expect, more service.

Transit-tax opponents have not put forward a unified position on the city’s bus service. Some say the system should return to a much smaller model, with fewer express routes into the suburbs. Others say the system could slash its operating budget from $85.3 million to $60 million and still be effective.

Cutting bus funding would be a mistake, McCrory says. He believes the system will become more efficient as the region — and bus ridership — grow.

The Charlotte metro area has grown from 1.33 million people in 2000 to an estimated 1.58 million in 2006. At that pace, the six-county region would top 2 million by 2014. Much of that growth would be outlying counties such as Lincoln and Iredell.

“The bus system has far exceeded my expectations. Just look at the Huntersville park-and-ride lot,” said McCrory, who faces GOP challenger and transit critic Ken Gjertsen in the Sept. 11 primary. “Those cars would be on the highway.”

Here are six key questions about Charlotte’s bus system.

What was the 1998 vision?

Mecklenburg voters were asked that year to approve a half-cent sales tax to fund mass transit. The plan called for multiple rapid transit corridors and a massive increase in bus service. The centerpiece was to be a light-rail line from uptown to near Pineville.

The plan was unveiled amid worsening traffic congestion — especially along Interstate 485 — and a regional air quality that was out of compliance with federal ozone regulations 11 times the previous year.

The Charlotte Department of Transportation, and its successor CATS, wanted to improve service for its core market — people without cars — by making bus service more frequent and to more places. It also wanted to lure “choice riders” out of their cars with express routes for commuters. And when rapid transit corridors were built, such as the light-rail line, buses would be used to bring passengers to stations.

Light rail also was to channel high-density development into corridors along the rail line. The bus expansion, however, was almost exclusively about moving people.

Critics said the plan was too vague and would do little to ease road congestion or improve air quality.

Voters approved the tax 58 percent to 42 percent. More than 25,000 voters skipped the tax question altogether — more than the margin of victory.

CATS chief executive Ron Tober arrived the following year.

Has the vision been fulfilled?

By some measures, yes.

Ridership has increased 66 percent since voters approved the transit tax.

Before the tax, about 10 percent of CATS riders were considered “choice riders.” Today, Tober says, an estimated 40 percent are opting to leave their cars behind.

To lure those riders, CATS expanded the number of express routes that target commuters. It now operates more than 20 such routes, some reaching deep into neighboring counties.

CATS also has seen ridership bloom on “community circulators” that go short distances along corridors such as Beatties Ford Road. These high-frequency buses often target people who have no cars.

Steven Polzine, of the Center for Urban Transportation Research at the University of South Florida, said CATS’s ability to increase ridership has been impressive. Spending money doesn’t guarantee new riders, he said.

The transit system in Austin, Texas, for instance, increased its operating budget for buses by 50 percent in inflation-adjusted dollars from 1998 to 2005, yet ridership rose only 11 percent.

When voters approved the transit tax, Charlotte transit officials had a goal to double bus ridership by 2010. They will likely fall short of handling 24 million passenger trips but could handle roughly 22 million if ridership trends continue.

Has the expansion been cost effective?

Before the tax, the city’s smaller bus system was one of the nation’s most efficient. That was due in part to its low labor costs, but also because the system was less ambitious: It mostly served people without cars who took short trips.

When CATS expanded its bus service into the suburbs, where populations are less dense and travel distances are greater, operating costs rose dramatically.

Though CATS has added suburban riders, critics question whether expansion has been worth the cost. The bus system’s operating budget has grown from $25.1 million in 1998 to $85.3 million in 2007.

In 1998 the bus system paid, on average, $2.12 for each passenger trip. That doubled to $4.31 in 2007 and is projected to reach $4.60 next year.

That cost-per-trip is more than other major N.C. cities and has risen faster than the national average.

Polzine said a bus system is no longer cost effective when its cost reaches $5 per passenger trip.

Another indicator to watch, Polzine said, is the average number of riders a CATS bus carries one mile.

Before the tax, CATS had roughly 10 passengers per mile, just under the national average of 11. The nationwide average has since declined to 10.3. In Charlotte, that average is estimated now to be between 7 and 7.5, according to an analysis of federal transit data.

Dropping below 7 is a problem, Polzine said, a sign that some buses may be burning more fuel and creating more traffic congestion than passengers would if they drove.

How big is the CATS system, compared with cities of

similar size?

CATS’s bus service is large when compared with similar cities, especially those with low population densities such as Charlotte.

It handles more than twice as many passenger trips as Nashville, Tenn., and nearly twice as many as Jacksonville, Fla. And it dwarfs Raleigh, which has roughly one-fifth the number of passenger trips.

But other cities similar to Charlotte also have poured money into buses.

Austin is a similar-size city but is more dense. It also operates a large bus system. Its 2005 budget (the most recent in a federal database) was $121 million, and it had 33 million passenger trips. CATS had 19.8 million passenger trips in fiscal ’07.

What happens if the tax is repealed?

Pam Syfert, Charlotte’s former city manager, said last spring that city residents likely would see a property tax increase to replace some of the lost sales tax revenue.

If the property tax were increased $58 on a home valued at $159,900, Syfert’s staff said, the light- rail line could operate with reduced service and CATS would return to a late-1990s bus system, mostly for riders without cars. It would cost $171 in additional property taxes on the same house to keep the bus system intact and to run the light-rail line as planned.

Former county commissioner Jim Puckett, who favors repeal, says CATS could return to what he calls an “urban system” that serves people without cars, rather than reaching to attract “choice riders.” Others believe the city can retain a robust system even with a smaller budget.

They question whether the half-cent sales tax is the best way to fund transit because it’s a guaranteed revenue stream, regardless of CATS’s need.

“The point of this whole exercise (repealing the tax) is right-sizing our transit system,” said Jeff Taylor, a CATS critic who said he believes CATS could operate its buses effectively for $60 million annually, down from 2007’s operating budget of $85 million. “If you were a private company, would you continue growing a system that is becoming less efficient?”

Will the bus system continue

to grow if the tax is kept?

Tober said CATS will continue to expand its buses, though at a slower rate. He offered no timetable for bus expansion but said the region’s projected growth will justify the higher budgets that the sales tax would likely generate.

Because the N.C. legislature approved the half-cent tax for transit only, it cannot be spent on roads or schools.

When evaluating CATS’ s performance, Tober and his staff don’t focus solely on cost-per-trip. They also consider factors such as how many people its buses move in an hour, and whether rider subsidies are going up or down.

A CATS bus in 1998 moved just under 30 people an hour. That fell significantly after the tax but recently has started to increase. It averaged 23 in 2005, according to government statistics, and rose to 24.2 in 2007, according to CATS.

Tober said he also watches the percentage of bus operations that are supported by riders, either through bus fares or service reimbursements from private businesses or governments.

Before the tax, riders paid 27 percent of CATS’s operating costs. That fell significantly early in the decade but has stood at about 17 percent for several years. The median is 22 percent for the 100 largest transit systems, according to data from the American Public Transportation Association.

Critics say CATS should raise fares to roughly 25 percent of operating costs.

CATS said that in fiscal year 2009 — the first full year of operating light rail — 68 percent of the sales tax will be spent on buses. Critics questioned whether that ratio would fall if more trains are built.

CATS says the sales tax can support buses and trains, but it is under no mandate to spend a set percentage on either.

CATS had 217 buses and vans in 1998. Today it has 497. CATS also improved numerous bus stops, adding better signage, 217 new shelters and 77 new benches. Other capital improvements include three new transit centers outside of uptown and new park-and-ride lots for commuters.

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