Free Market

SLC Mayor Proposes Taxpayer-Financed UTA Passes

In an effort “to incentivize transit use and make riding transit more convenient,” Salt Lake City Mayor Ralph Becker has announced what’s being called “a fresh solution to help improve air quality”: taxpayer-subsidized transit passes.

Should the plan be approved by the city council, SLC residents would be able to purchase for only $30 per month what others must pay $198 per month. Taxpayers would finance the remainder of each ticket. Businesses and other organizations participate in these bulk pass programs with the UTA to offer their employees or members reduced rates, but UTA spokesman Remi Barron tells Libertas Institute that this proposal “is a first for a municipality in Utah and possibly the entire country.”

If approved, Salt Lake City and UTA would conduct a pilot program for one year, beginning in early 2014. It is expected that up to 6,000 passes might be sold. Salt Lake City would not directly be subsidizing the remainder of the cost, though $150,000 in administrative costs are being requested, pending city council approval, to operate the program.

According to Barron, UTA believes that “this program will be revenue neutral, meaning UTA anticipates we need 6,000 residents to sign up for this, so it won’t cause the city or UTA to lose any money. Our projections show this should be possible, but it is a pilot program and will be evaluated after one year. If it succeeds, other cities can certainly consider a similar arrangement.”

Despite $1.2 billion in new infrastructure investments recently (the majority of which is financed by taxpayers), UTA ridership either has remained constant or declined. One may assume, then, that UTA is eagerly looking for ways to boost participation in its services. In another recent program, UTA partnered with Zions Bank to offer free week passes to encourage more Utahns to utilize the transit system.

A 2012 performance audit of UTA found, using 2010 data, that paying patrons of UTA covered only 20% of UTA’s operating costs. (When compared to UTA’s total costs, fares only accounted for 13% of revenue.) Thus, while a normal monthly pass is $198, even that is heavily subsidized by taxpayers. Reducing that pass to $30 for Salt Lake City residents simply shifts more of the burden onto taxpayers.

Those who ride UTA buses pay 15% of the total cost through their fare, whereas those who ride FrontRunner pay only 5%.

All UTA passes are taxpayer-subsidized, illustrating the lack of market demand for these services. If people had to pay eight times the amount of current fares (taking the 13% to 100%), nobody would use it. Thus, to exist, UTA must coercively take money from Utahns at large to operate.

We oppose forcing those who do not use a service to pay for it. We do recognize the need to reduce pollution, and therefore encourage those interested to voluntarily collaborate and find persuasive ways to entice people to carpool, ride bikes, or telecommute. The element of force must be removed from what is otherwise a noble goal.