Tuesday, 10 August 2010

Draft SB 375 Targets Highlights Need for Additional Transit Funding to Achieve Greenhouse Gas Emissions Reductions

On Monday, the California Air Resources Board released its SB 375 staff report with more precise draft targets.  I had blogged earlier about the original draft target ranges released at the end of June.

The Southern California Association of Governments has the most aggressive per capita greenhouse gas reduction target, at 8%. The other three large MPOs (Bay Area, San Diego, and Sacramento) all have reduction targets of 7%.

What are the main differences between these regions that could explain the slight difference in target?  One major difference is that the central SCAG region (Los Angeles County) will significantly expand its rail transit system in the next thirty years, and as few as ten years.  As a goal of SB 375 is to concentrate new development near transit stations to increase the proportion of trip origins and destinations which are accessible using transit, this aggressive transit-building program will bring rail transit to existing density, shifting some existing trips to transit and allowing for new trips to be made via transit.

However, this increase in transit ridership comes at a cost.  No large transit system in the United States achieves a farebox recovery ratio of 100% or higher, all receive some operating subsidies.  This means that a system is losing money with each additional passenger.  No U.S. system has been able to completely close this gap with increased ridership .  While small systems with low vehicle occupancy ratios raise less of their operating expenses from fare revenues, even large, well-traveled systems in New York City, Philadelphia, and Washington D.C., raise only 3/5ths of their operating expenses from fares.

Los Angeles Metro has a farebox recovery ratio of approximately 30%.  In order for the system to increase ridership without increasing its required operating subsidy, it must increase fare revenue to match increases in operating expenses. If it cannot do this, it must seek additional operating subsidies to provide the transit service needed to reduce regional greenhouse gas emissions and make transit a preferred alternative travel mode.