The CHAIRMAN. Well, if not three, would you recommend two or one or what? Mr. HAHN. I meant not at all. I meant not extend it at all. The CHAIRMAN. I thought you just said you would recommend that we amend one to freeze it to 10 cents. Mr. HAHN. I would go back to the legislative scheme as it was 3 years ago which is that a subsidy is provided, if the profit as fixed by the Transit Commission taking into the account the tax exemption for real estate tax and fuel tax, fall short of the profit that's fixed by the Commission. Then the Commission would certify that as the subsidy. That was the law as it was 3 years ago. The CHAIRMAN. Spell it out for me again. Just give me a quck refresher course. What was the law 3 years ago? Mr. HAHN. Yes. The law 3 years ago provided that if after giving effect to any motor vehicle fuel tax and real estate tax exemption for that operating income-if after a 12-month period the profit picture shown by the company was still less than the allowable percent of profit fixed by the Transit Commission and after subtracting from that amount the tax exemptions allowed which is about one-quarter of a million dollars for real estate and I don't know how much for fuel tax, the difference is submitted to the city and that is the subsidy that's provided. The CHAIRMAN. You would prefer to go back to that method? Mr. HAHN. Yes; I would. The CHAIRMAN. Do you know what the profit picture of D.C. Transit is at the current time as it would relate to that 3-year-old formula? Mr. HAHN. Yes. The profit picture without this proposed 30-cent subsidy would pro forma probably be several hundred thousand dollars instead of about $2 million or $3 million. What that would mean in relation to the rate of return that the Commission has set I'm not sure. I don't know what that figure would be. The CHAIRMAN. We will get it computed by the Commission or somebody as to what the subsidy would amount to under the old formula vis-a-vis the new formula. Even under the old formula if we went back to that there would be some subsidy going to the D.C. Transit? Mr. HAHN. Yes; in the year preceding 1969 it ran several hundred thousand dollars. The CHAIRMAN. But it would, in your judgment, be a lesser figure even than what is contained in the bill? Mr. HAHN. What it turned out to be, and I am assuming it would be less, conceivably it could be more, but I think I would prefer that. The CHAIRMAN. Do you recall what the gross total of the subsidy amounted to last year? Mr. HAHN. It seems to me that we were through with the amendment and several supplements, and that it came to nearly $2 million in fiscal 1971 and is projected for $3 million in fiscal 1972. The CHAIRMAN. The exact figure, you are right, was $1,900,000 in fiscal 1969. It used to be $1,900,000 and it is going to go up to $2,900,000. Thank you very much, Mr. Hahn. Mr. George A. Avery, Chairman, Washington Metropolitan Area Transit Commission. Mr. Avery, do you have someone with you? STATEMENT OF GEORGE A. AVERY, CHAIRMAN, D.C. PUBLIC SERVICE COMMISSION, AND CHAIRMAN, WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION; ACCOMPANIED BY DOUGLAS M. SCHNEIDER, EXECUTIVE DIRECTOR, WMATC Mr. AVERY. Yes, I do. The CHAIRMAN. Mr. Avery, you may proceed to introduce your associate. Mr. AVERY. Yes. I am George A. Avery. I am Chairman of the Public Service Commission but I appear this morning in my capacity as Chairman of the Washington Metropolitan Area Transit Commission. The CHAIRMAN. You wear two hats. Mr. AVERY. I have with me this morning Mr. Douglas M. Schneider, who is the Executive Director of the Transit Commission. The CHAIRMAN. Before we hear from you, would you have Mr. Schneider or someone from your office, Mr. Avery, give us the old 1968 formula and compute it out for us as best you can from your figures what the subsidy would be under that old formula as contrasted with the current formula. Mr. AVERY. For which school year? The one last year or the one just ending? The CHAIRMAN. Do you have figures for the one just ending? The CHAIRMAN. All right, let's take the one for the last complete year for which you have the figures and put next to it the actual subsidy for this year under the current system, so we can compare it. Mr. AVERY. I will undertake to do it. I don't know how long it will take. Like a lot of other things Mr. Hahn was inaccurate in his description of the old law. It wasn't simply 61⁄2 percent of the total operation. The old law said he would have to make less than 612 percent on Metropolitan District operations. That required complete allocation of all the revenues and expenses between the intra-District and other than intra-District operation. It's a very complicated process. I am sure we can work something up for you but I just want to say I don't think I can have it for you today. It's a fairly complicated process. The CHAIRMAN. All right. You don't have to go into the substeps but get it down to the final penny and final dollar. If you want to label it your best calculated estimate ball park figures that will do for my purposes. (The information follows:) School transit subsidy for D.C. Transit System, Inc. estimated under P.L. 87-507 actual under P.L. 90–605 Estimated school transit subsidy which would have been payable $1, 756, 185. 00 1, 942, 437. 26 Mr. AVERY. All right. As I mentioned I am appearing for the Transit Commission. That Commission is an instrumentality of Maryland, Virginia, and the District of Columbia which has the responsi bility for establishing fares to be charged by privately owned mass transit bus companies in the Metropolitan District. This includes the District of Columbia and the suburban counties in Maryland and Virginia. I appreciate this opportunity to offer my views on this important legislation. For many years transit companies in the District of Columbia have been required by law to carry schoolchildren at a fare not exceeding one-half the established adult fare. The present school fare of 10 cents per ride was established in 1958. This reduced rate does not provide sufficient revenue to cover the cost of carrying schoolchildren. Until 3 years ago, when Public Law 90-605 was enacted the other riders of the bus company had to make up this unrecovered cost since, in setting fares, we had to provide sufficient revenues to cover all costs. However, in the 1968 legislation (Public Law 90-605) the Congress made it possible to have the cost of carrying schoolchildren at the reduced rate borne by the community as a whole. The 1968 law required the government of the District of Columbia to pay to the carriers the difference between what the schoolchildren pay and what they would pay if they were required to pay the full adult fare. Philosophically, we at the Commission believe that the 1968 law places the burden of providing transportation for schoolchildren where it properly belongs, on the community at large rather than on only those members of the community who happen to ride the bus. Speaking from the standpoint of the practical result, we can report that the shift of that burden has resulted in substantial benefit to the city's bus riders and to the city itself. We are all aware of the serious inflation that the Nation has experienced during the past few years. For the local transit industry and for the industry nationwide, increasing costs have imposed the requirement to charge increasing amounts of fare. For District of Columbia riders, the bus fare on D.C. Transit has reached 40 cents, and if the school fare subsidy were not available, that fare would be even higher. The CHAIRMAN. In your capacity as head of the Transit Commission have you, from time to time, examined fare structures in other large metropolitan areas? Mr. AVERY. Oh certainly. We usually have great detailed information on that on each of our rate tables. The CHAIRMAN. For instance, I imagine your records show the fare in Kansas City, Mo. Is it 50 cents? Mr. AVERY. Yes. The CHAIRMAN. In Chicago, Ill., I think the rate is 50 cents or is it 40 cents? I'm not sure. Mr. AVERY. I'm not sure what the current status is in March or April. It was 40 cents and they were talking of going to either 45 cents or 50 cents and I frankly don't know. Maybe Mr. Schneider has got some recent rate. The CHAIRMAN. I think St. Louis, Mo., is 45 cents. Without holding you to precise pennies, would it be a fair estimate to say that of the 20 largest cities of this country that have transit systems, and all 20 do of one form or another-bankrupt companies, moribund companies, some buses floating around in 20 of the largest cities-will the great majority of those systems have fares in excess of 40 cents? Mr. AVERY. I don't know. Probably not. We could get you that precise information and I will do so. The CHAIRMAN. Do some have fares lower than 40 cents? Mr. AVERY. Yes; New York is 30 cents. New Orleans is 15 cents? The CHAIRMAN. New Orleans is 15 cents? Mr. AVERY. Yes. The CHAIRMAN. What kind of system? Mr. AVERY. They have a good deal down there. The transit system is owned by the gas and electric company and they pursued a policy there that I think is a very wise one. The transit operation runs at tremendous losses. The CHAIRMAN. That's a real wise policy? Mr. AVERY. But they make up the losses on the gas and electric bills. You see what I mean, the company overall makes a profit. It loses money on its transit operation but it makes a profit overall. I have spoken of this many times, I think, before you and I think you know how strongly I feel about the need for subsidizing the mass transit operation. I think having fares at this kind of level you are talking about in other cities and the level we have here is definitely counterproductive to sound transportation planning or social policy. The only way to solve that problem is to meet some of the costs of operating those systems from a source other than the farebox. And they are just lucky down in New Orleans. I guess from the beginning of the century the company has been owned by the gas and electric company and they pursue that policy. Therefore, they have a much better public transportation system. The CHAIRMAN. So whatever losses go to the Louisiana Public Service Commission for utility rates approval? Mr. AVERY. Right. The CHAIRMAN. And in their rate structure they bill in the loss factor of the transit system? Mr. AVERY. That's exactly it. The CHAIRMAN. So the utilities are subsidized. Mr. AVERY. That's right. I started to say San Francisco. I believe it's 20 cents at the moment and they have an item in the city budget every year. The last figure I got was $19 million. That just is the item in the budget that goes to cover the cost of the transportation system which is not covered by farebox revenue. So they are able to keep their system running. The CHAIRMAN. Is that privately owned? Mr. AVERY. No; that is a public railway. The CHAIRMAN. Get together the 20 largest cities and also indicate whether they are public or private. Mr. AVERY. Right. (The information requested follows:) CASH FARES, TRANSFERS, AND MAXIMUM FARES IN 20 LARGEST U.S. CITIES 1 Summary includes 2 privately owned systems and 1 publicly owned for New York City, N.Y. (a) Green Bus Lines, Inc., (b) Jamaica Buses, Inc., (c) New York Transit Authority. 2 Free. 3 Denotes zone system includes 107 zones within city with a possible maximum fare of $1.87 for a 57-mile trip within the city. 4 Each use. On 1 line an additional $0.02 charge is made at specified intersections. $ If no transfer is needed. |