May 5 is the new decision date for the board as it considers sending a proposed increase of two-tenths of a cent on each dollar to the ballot. The deadline to place the measure on the primary election ballot is May 25.
The board, made up of five elected officials and three citizen members, did follow General Manager Mike Harbour’s recommendation to no longer consider an alternative proposal: an increase of three-tenths of a cent. Harbour said a compelling case could be made for such an increase, but he has heard many concerns about doing so in the poor economic climate.
The remaining proposal, if forwarded and approved, would retain current service levels with some money left over. Without it, Intercity Transit would need to cut services next year to keep its reserve at a target level. Potential cuts include the Dash shuttle between the Capitol Campus and Olympia Farmers Market, some fixed-bus routes and Sunday service.
The current sales tax imposed by Intercity Transit is six-tenths of a cent.
The delay buys time for Intercity Transit. State lawmakers are considering an increase to the state sales tax to close a budget shortfall. Harbour will attend an upcoming Olympia City Council meeting to answer questions raised during its discussion last week.
The council, considering its own tax measure for August, couldn’t agree to support the transit agency’s measure. The actions of state and Olympia leaders could affect the measure’s chances on the ballot, if it’s forwarded.
It was clear Wednesday that board members are concerned about asking residents to raise taxes. They instructed Harbour to present information about cost-cutting that Intercity Transit has done until now and to provide options to further reduce costs. Harbour is scheduled to make that presentation April 7. Harbour did caution the board that labor costs make up the bulk of its budget; three-quarters of its work force is unionized. To generate significant cost-savings, he added, the board would have to decide whether to sacrifice programs.
Tumwater City Councilman Ed Hildreth said he would propose a 3 percent to 4 percent cut in the transit agency’s annual operating budget of about $30 million.
“We need to show the taxpayer that we’re doing everything we can to have a stabilized and sustainable budget,” he said.
Eve Johnson, a citizen representative, said it’s critical that Intercity Transit educate voters about its deteriorating financial picture and how that would affect services without additional revenue.
“Let’s tell people what’s on the line,” she said. “I don’t think that’s clear to people.”
Falling sales-tax revenue, which represents three-quarters of Intercity Transit’s operating budget, is forcing the agency to dip into its reserve to pay for daily operations.
Intercity Transit’s policy is to hold enough money in reserve to pay for 90 days of operating expenses. The reserve fund is projected to fall below that target by the end of 2011 without additional revenue, according to a copy of the resolution that would send the measure to the ballot.
In January 2012, the resolution stated, Intercity Transit would have to cut its fixed-route service by 23 percent without additional revenue.
In 2002, voters approved increasing the sales tax to 0.6 percent from 0.3 percent. Intercity Transit used the money to restore some services cut in the wake of the passage of Initiative 695, which replaced the motor vehicle excise tax with $30 car tab fees.
The transit agency made the improvements in three phases. Its finances were healthy enough to provide a fourth phase, which increased the number of commuter bus trips to and from Pierce County. That improvement was implemented in February 2008, as the state and nation began to feel the effects of the recession.
The board has considered a sales-tax measure for 18 months. It postponed putting one before voters last year and instead looked at August, thinking that economic conditions might improve.
Christian Hill: 360-754-5427
chill@theolympian.com
www.theolympian.com/outsideolympia
