Fair Fares Act expected to give MTA riders relief

This summer, absent any intervention, the Maryland Transit Administration (MTA) will raise fares by at least 10 cents, as it has been legally required to do for the past decade for its core services: local bus, Light RailLink, and Metro SubwayLink. Historically among the cheapest for a major U.S. transit agency, MTA fares have been steadily climbing while many peer agencies are heading in the other direction. A standard one-way ticket cost just $1.60 in 2012 but would be $2.10 with this increase.

An intervention is set to come though, thanks to a bill recently approved by the Maryland General Assembly that will undo the 2013 requirement that the MTA tie its fares to inflation and raise them every 2-5 years. The “Fair Fares Act” HB 673 from Del. Mark Edelson (D-Baltimore City) and its Senate “crossfile,” counterpart SB 617 from Sen. Shelly Hettleman (D-Baltimore County), both passed the General Assembly on April 5.

The Fair Fares Act does two things. First, it uncouples MTA fares from the requirement that they increase with inflation, as measured by the Consumer Price Index. Second, it gives the MTA the authority to alter fares, including raising them, as it sees fit — albeit with some conditions, namely first giving public notice and holding a public hearing before making any fare changes.

“The idea is that it would avoid this oncoming required increase to the fares and it would provide the authority back to MTA — as it should be, because they’re the ones providing the services — to determine what the appropriate fare is,” said Edelson.

The stance has earned Edelson and Hettleman the MTA’s firm support, and the bill is also backed by the Greater Washington Partnership (and its “Baltimore’s Transit Future” campaign), the Coalition for Smarter Growth, and the Maryland AFL-CIO. The legislation would not only give MTA flexibility and its core riders’ wallets relief, it is also sparking much-needed conversations about how to pay for transit going forward.

Why does this mandate exist?

The provision that first set this policy in place was added almost as an afterthought. When the General Assembly passed the “Transportation Infrastructure Investment Act of 2013,” the main focus of most transit activists was to raise Maryland’s gas tax, which at that point hadn’t been done since the early 1990s. They also wanted to ensure that the tax, traditionally one of the main revenue sources for Maryland’s Transportation Trust Fund, rose more consistently in the future.

“Unlike say, the sales tax, which is a percentage of sales, the gas tax was a flat 20-some odd cents per gallon,” said Brian O’Malley, president and CEO of the Central Maryland Transportation Alliance (CMTA). “So every year that inflation went up, the buying power of that 20-some odd cents got weaker and weaker. Everyone knows about inflation but inflation in the transportation sector has been faster than inflation in the economy overall, so by 2011-2012, the buying power of the revenues that were coming in was not at all keeping up with the needs.”

Since raising the gas tax has never been a popular decision for most politicians, transit advocates figured that indexing the gas tax to inflation might be the best way forward. That did prove to be enough for the Baltimore-area delegations, but it still took a complex deal with the Montgomery County Delegation for more school funding and the Prince George’s County Delegation for money to build a new hospital, plus a LOT of negotiation, before a final compromise could be sealed.

Somewhere in all those negotiations, an amendment was added at the 11th hour to tie MTA fares to inflation, specifically, for most modes, by at least 10 cents following two years of consistent inflation. The amendment didn’t tie in any local transit agencies nor the multi-jurisdictional WMATA, just the MTA because of its status as a unit of state government. Even at the time, most transit advocates weren’t thrilled with it.

“We at the Central Maryland Transportation Alliance didn’t ask for that, didn’t particularly like it,” said O’Malley. “But we didn’t fight it because we saw a chance to have the gas tax increase go through.”

Fare hikes spark equity concerns

A decade later, many of the considerations that led to that 2013 compromise have changed substantially, chief among them the rise of hybrid and electric cars. Advances in fuel efficiency and changes in commuting patterns accelerated by COVID-19 are also expected to significantly alter the revenue outlook for the Transportation Trust Fund. The situation is dire enough that Senate President Bill Ferguson (D-Baltimore City) recently amended another transportation bill to set up a blue-ribbon commission looking at new funding sources for transit.

With Maryland set to reexamine how it funds transportation anyhow, for Edelson, the MTA’s existing fare change rules mainly raised equity concerns, which he says are at the heart of why he brought his bill.

“Particularly for our bus riders, the overwhelming majority are African-American and the overwhelming majority earn below $50,000 per year and below $25,000 per year and cannot afford to own a vehicle,” Edelson said. “MTA transit is their only option to get where they need to go to access critical services: jobs, doctors, schools, grocery stores, whatever it might be. So for us to increase fares on these riders, at a time when inflation is already significantly ahead of wage increases, is going to hit them in a terrible way and it’s completely inconsistent with our values of helping lift folks up out of poverty and creating a more reliable transit system that serves everybody. To overstate a line that’s been overstated, we would not be ‘leaving no one behind’ if we raise MTA fares.”

Even if it isn’t quite as dramatic as DC’s fare-free transit proposal, the bill at least starts the conversation about what it might take to get closer to that. It also fuels the discussion about how to fund public transit going forward, and about allowing MTA to follow national trends by experimenting with more flexible pricing arrangements based on factors like income, like the program the Massachusetts Bay Transportation Authority just adopted.

Edelson thinks free transit is a laudable goal and likely an achievable one, but getting there requires working within the current funding reality.

“Most of our transit system is supported by gas taxes and as more folks switch over to electric vehicles, gas taxes go down,” Edelson said. “I think it’s an excellent and admirable long-term goal to look at ways that we can make transit less expensive and ideally ultimately free for the rider. But we have to do that at the same time recognizing that we also have to be able to operate our state’s government and economy and budget, and we have to be able to operate within the confines that we have.”

Fair Fares heads to the the Governor soon

The Fair Fares Act’s path to the Governor’s desk wasn’t without a few obstacles. Both HB 673 and SB 617 saw Republican legislators unsuccessfully attempt to attach amendments that would have decoupled the gas tax itself from inflation. Other than that, the bills had a remarkably smooth track for a completely new piece of legislation. They widely passed out of their original committees, their original chambers, and the opposing chamber without a single amendment — a relative rarity for all but the simplest bills.

With a more transit-friendly face occupying the Governor’s Mansion in Annapolis these days, MTA riders (or at least their wallets) can likely breathe a little bit easier this summer.