Capital News Service

of the Michigan State University School of Journalism

Bus services face rising costs

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By JORDAN TRAVIS
Capital News Service

LANSING – The Ludington Mass Transportation Authority’s demand-response services will continue, despite rising costs but with stable state funding.

The operation offers rides on request to residents of Ludington, Scottsville and parts of Amber and Pere Marquette townships. Riders pay a fare, with discounts for senior citizens and people with disabilities.

Services won’t be affected because the authority had money set aside to cover funding shortfalls and other financial crises, Director Richard Collins said.

The operation is “very, very fortunate” to have what is called a rainy day fund, Collins said.
“If it wasn’t for that, we’d be cutting back services,” he said.

However, the savings will be nearly exhausted in two years if the service still has to use it, he said. At that point, Collins said the account balance would be “low enough to where I’m not comfortable using it to balance the budget.”

Dipping into the fund combined with low interest rates means that Collins will no longer be able to use interest earned on the money to help balance the authority’s budget.

The operation served 156,209 passengers between Oct. 1, 2007, and Sept. 30, 2008. Collins said that was a 4 percent increase over the previous year.

Money for public transportation services like Ludington’s comes from the state comprehensive transportation fund, part of the state transportation budget. While the state has not cut operating cost appropriations from $166 million, costs for public transportation services continue to grow.

Janet Foran, a communications officer for the Department of Transportation, said that despite shrinking revenues, “the state operating fund was held harmless.”

Foran said that a shortfall on matching federal dollars is likely, but the department won’t know until it has “definitive information” on the federal budget.

Federal money is also available, but Clark Harder said the state is at risk of losing it because it can no longer pay the matching portion.

Harder, the executive director of the Michigan Public Transportation Association, said that demand for rural services is up while state revenues are not.

“There were no significant cuts” to public transportation funding, he said, “but there was no growth either.”

Harder said that federal stimulus funds were available, but only to transportation districts that need new buses and other capital projects.

While Collins said that Ludington’s operation doesn’t need new vehicles, Harder said northern Michigan operations have difficulties running their buses for five years, the standard life span of “cut away” buses used by rural transit services.

The nearly $4.5 million portion of the state transportation budget reflects less than half of what Collins said the governor recommended for capital expenses, such as new buses.

Rep. Dan Scripps, D-Leland, said he’s working closely with members of the House Transportation Appropriations Subcommittee. They are considering recommendations from the Transportation Funding Task Force for finding new money sources, such as changing the state gasoline tax from a per-gallon cost to a percent of the sale price. This would raise money for state transportation needs, including mass transit services.

“We have to find funding solutions that keeps federal money and keeps investment in infrastructure,” he said.

Meanwhile, the authority is looking at ways to cut personnel costs, including health care, such as switching to a plan with a higher deductible.

The transportation authority also gets income from doing contract maintenance for other government agencies in the area, Collins said.

© 2009, Capital News Service, Michigan State University School of Journalism. Not to be reproduced without permission.

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