Should UTA have free fare forever? Utah lawmakers weigh costs

Utah’s largest transit company called its month-long trial of its free fare service in February “very successful,” boosting ridership by 16% from the previous month.

It was the Utah Transit Authority’s busiest ridership month since the COVID-19 pandemic severely impacted the agency’s service in March 2020. UTA has since seen stronger months as ridership has steadily returned to 75% of pre-pandemic levels.

There are other incentives that have also waived the fares for some drivers. For example, UVX in Utah County has remained free because of federal funding the project received, while Salt Lake City executives helped pay for transit passes for all Salt Lake City School District students and staff this school year.

“That’s an issue we’ve all been focused on to some degree,” said Andrew Gruber, executive director of Wasatch Front Regional Council. “I will say that we have seen – it’s measurable, but it’s still piecemeal – that with zero fares, when there is no fare, ridership has had a notable increase.”

But can permanently eliminating fares further increase ridership, allowing UTA to serve as a viable alternative to reducing traffic levels and traffic-related air quality issues along the Wasatch Front? And if so, is it worth the cost of removing fare collection?

These are the questions that UTA, the Utah Department of Transportation, the Wasatch Front Regional Council, the Mountainland Association of Governments, and several other organizations, including the Nelson/Nygaard consulting firm, are trying to resolve. However, their curiosity sparked a study examining the feasibility and incentives of removing fares from UTA’s service.

Though the study is ongoing, the group presented its early findings of four possible options to members of the Utah Legislature’s Transportation Interim Committee during a hearing Wednesday. The study, Gruber told the committee, will not recommend any decisions; Rather, it is intended to provide information that lawmakers can use when considering waiving fares in the future.

“We don’t endorse any of these,” he said. “Each of these options represents a different way we can get more people using UTA services, improve mobility across the region, and leverage the investments already made.”

How important are tariffs?

The study notes that UTA expects to raise about $34 million in fare awards this year and $36 million next year. Both numbers would be the highest since the pandemic. However, the agency raised an average of $52 million in the five years leading up to the pandemic-related ridership losses.

This year’s tariff survey accounts for only about a tenth of UTA’s total sales. Tariffs accounted for no less than a fifth of all revenue in 2015; However, this number continues to shrink due to the rise of other revenue sources such as sales tax, federal assistance or other options.

“Overall, the tariffs represent a relatively small part of the operating costs that UTA needs for ongoing operations,” said Thomas Wittmann, Senior Principal at Nelson/Nygaard.

Still, it’s a big chunk that UTA would need to recoup from new sources like the Utah Legislature.

The report estimates the cost would be about $34.5 million to remove it entirely, or $38.5 million for a year-long pilot program, based on 2023 projections Cost of operating fare collection services and expanding paratransit services.

The report also looked at other alternatives, such as abandoning bus-only fares. That would cost about $24.5 million. It would cost a tad under $4 million to remove the tariffs for anyone with an income 150% of the current federal poverty rate. Another option is to drop the current fare from $2.50 per trip to $1, which would cost about $8.8 million.

However, Wittmann said any of these changes would likely affect ridership, which could help move vehicles off the roads.

When reviewing similar policies in other places like Kansas City, Missouri or Richmond, Virginia, they’ve found that ridership is increasing, existing public transit users are traveling more frequently, and more people are willing to try public transit for the first time, he said . That’s because it removes a “barrier to entry”, including the nerves first-time users might have when it comes to not knowing how to pay for a bus or train ride.

This chart shows the projected ridership growth associated with the four Utah Transit Authority fare waiver or reduction options currently under investigation by multiple organizations.  A final report is expected in the coming weeks.

This chart shows the projected ridership growth associated with the four Utah Transit Authority fare waiver or reduction options currently under investigation by multiple organizations. A final report is expected in the coming weeks.

Nelson\Nygaard on the Utah Legislature

Eliminating fares altogether would result in 9 million additional passengers, an increase of almost 36%, according to the organizations behind the study project. The other options are forecast to have the potential to increase ridership between 7.6% and 18%.

“The system-wide zero tariff shows the highest potential passenger increases, but also the associated potential costs,” said Gruber.

However, Wittmann warns that the study is not yet complete. The team is also reviewing other elements such as quantifying community benefits associated with plan cancellations or reductions. Costs are also expected to increase with inflation beyond 2023.

Why UTA may take some time to sort it out

But Utah lawmakers aren’t sure they’re willing to step on board to cover the lost revenue associated with the fare cancellation.

The overarching theme seemed to be whether UTA should be a corporation or a non-profit service. For example, Rep. Karen Peterson, R-Clinton, compares UTA ​​fares to UDOT’s transition to more road pricing.

“I actually have a hard time imagining that because I think the fee for the service is good tax policy — so that’s a struggle for me,” she said.

Other members of the committee added that they are not sure that fares are the reason more people aren’t using public transport.

Rep. Candice Pierucci, R-Herriman, said she often hears from her constituents — and her student faculty at Utah Valley University — that quality of service trumps cost. Improved service could reduce travel times, which could tempt drivers to switch to public transport.

“They’re not asking for a free fare, they’re asking for frequency, reliability and accessibility, and I don’t see how reducing the fare addresses any of those needs,” she said. “In fact, I would say it limits the ability to generate revenue to be able to pursue these options.”

Gruber agrees there is still work to be done before fare cuts are proposed as a possible scheme, adding that he appreciates the committee’s feedback and that the research will continue. Some of the suggestions brought up in the meeting are things that the team may want to review in the future.

Sen. Wayne Harper, R-Taylorsville, took feedback from both sides and noted that Wednesday’s meeting is why he believes it’s important to study the issue before rushing to any decisions.

“It’s a big problem that we’re dealing with,” he said. “This is an important political discussion. … This is a good study. They’ll come back with recommendations, and then we’ll have to decide what we think is best for the state of Utah as elected officials.”

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