On June 10, Pierce Transit’s board approved a 28 percent cut in service for early fall. More than 80 transit jobs would be lost and bus and shuttle service would be slashed more than 100,000 hours a year, hitting weekend riders especially hard. Among the hardest-hit would be riders in outlying areas, where transit boundaries already receded last summer.
Now, barely six weeks after that June 10 vote, the agency said it intends to cancel the reduction, much to the surprised delight of riders such as Laurie Alvaro and to the surprised annoyance of critics such as Nick Sherwood.
“I don’t know how they managed to pull that one off,” Alvaro said. “That’s amazing.”
“It makes them look terrible,” Sherwood said. “The numbers are a moving target with Pierce Transit.”
The transit board is expected to approve the reversal this week.
Pierce Transit says it boils down to sales tax revenue — by far the biggest driver of its budget — increasing during the first four months of this year. That revenue went up 11 percent compared with the same period in 2012, once the smaller transit service area that went into effect last year is factored in.
The agency expects that revenue to hold firm as the economy continues to warm.
“The sales tax projections changed,” said board Chairwoman and Tacoma Mayor Marilyn Strickland. “We didn’t have that type of information at the time (of voting in June).”
During the past two weeks, Pierce Transit analyzed its bottom line and concluded it could continue bus and shuttle service at current levels, said Chief Executive Officer Lynne Griffith.
The transit system’s board will vote Wednesday on the agency’s recommendation to cancel the reduction from 417,000 to 300,000 annual service hours, now scheduled for Sept. 29.
Sales tax revenue accounts for about three-fourths of Pierce Transit’s budget, but it is a highly volatile funding source. Griffith said Pierce Transit had been monitoring sales tax revenue. But it needed to see a pattern for a number of months before running its financial model. That calculation includes more than 200 line items, such as equipment costs, fuel, wages and benefits.
“It will tell what you are going to be able to afford in the way of service hours,” Griffith said.
Operations already had been reduced from 417,000 to 399,000 hours last month, a cut of 4 percent, because of attrition among bus drivers.
Griffith now says Pierce Transit can afford to keep service at that current level at least until June 2014. At that time, Pierce Transit could face a reduction of 10 percent, or 40,000 more hours, she said.
The agency said sales tax revenue has averaged about $4.9 million per month for the first four months of this year. (Pierce Transit said Friday that it had revised downward the monthly average of $5.1 million it announced Wednesday.)
The last time the agency crunched its numbers was in February after voters narrowly rejected raising the sales tax by three-tenths of 1 percent in November — the second defeat in less than two years.
During the campaign for Proposition 1, Pierce Transit said it would have to slash service by as much as 53 percent if voters didn’t increase the sales tax from six-tenths of 1 percent to nine-tenths of 1 percent.
Sherwood, who led the Reject Proposition 1 campaign, said Pierce Transit’s new plan to cancel cutbacks validates what he and other opponents of the sales tax increase maintained last fall.
“We always said the money was there,” Sherwood said Thursday. “They were crying wolf since the beginning.”
But even Sherwood said he was surprised Pierce Transit dropped the 28 percent cut so abruptly last week. He said the agency is now saying, “Never mind.”
“They have to be embarrassed by that,” he said.
Strickland said the board has exercised caution.
“I don’t think it’s bad to err on the side of being conservative,” Strickland said. “We put off making cuts as long as we can because we know these cuts affect people’s livelihood.”
She said it’s been heartbreaking to hear riders tell the board month after month how the cutbacks will hurt them.
About 56 percent of Pierce Transit riders come from households with annual incomes of less than $20,000.
Riders have pleaded with the board not to cut service, saying they won’t be able to get to work, doctor appointments, the grocery store and church.
Alvaro is one of those riders. The 51-year-old said last week she’s pleased she’ll still be able to take the bus from Lakewood, where she lives, to her job at the Emerald Queen Casino in Fife.
“I’m surprised they were able to find the revenue to save our buses,” she said.
Pierce Transit still needs to see what happens with revenue the next two quarters, Strickland said. “It’s not time for high-fiving or celebrating yet. The good news is we won’t have to make as many cuts.”
RELYING ON REVENUE
Like Pierce Transit, other branches of local government are reporting rising sales tax revenue.
Strickland said Tacoma’s sales tax receipts are 7.8 percent more than at this time last year.
Pierce Transit’s windfall also dovetails with an overall uptick in state revenue, which was a major reason the Legislature finally passed a budget at the end of June. State sales tax revenue is up 8.5 percent for the most recent period.
And Pierce County’s increase mirrors the transit system’s. The county’s sales tax revenue for the first six months of 2013 increased 11.6 percent from last year, said county budget and finance director Gary Robinson. Sales tax accounts for 19 percent of the county’s general fund.
In King County, Metro Transit reported last week it’s seeing improved sales tax revenue, but not at the level of Pierce Transit. Metro Transit expects sales tax revenue to increase 6 percent this year, more than its earlier projection of 4.4 percent, said spokesman Jeff Switzer.
Metro Transit is facing a cut of up to 600,000 annual service hours, or 17 percent, in fall 2014 after a two-year, $20 vehicle tax expires in June.
“We’re saying it’s a small bit of good news,” Switzer said of rising sales tax revenue. “It still doesn’t close the gap.”
While these other Puget Sound governments report improved sales tax receipts, they aren’t making dramatic spending adjustments like Pierce Transit is.
Pierce County’s budget and finance managers recommend holding money from the sales tax increase in reserve to offset potential unfunded expenses, such as a projected $4 million deficit in the jail’s budget, Robinson said.
Pierce Transit Chief Financial Officer Wayne Fanshier described his agency’s recommendation as a postponement of service cuts. The transit system’s annual service hours already have plunged from 617,000 in 2008 to 399,000 now — a cut of more than 35 percent the past five years. That’s partly because some cities in East Pierce County have withdrawn from transit boundaries.
“We can’t afford this system,” Fanshier said. “It’s still going to go down.”
At the transit center at Tacoma Community College, many people hadn’t heard Thursday that the bus system plans to cancel the reductions.
Joan Pieplow said she had been worried about whether she’d still be able to catch the 6:05 p.m. bus home from the Ruston day care where she works.
“I’m glad they changed their mind,” said Pieplow, 53, of Tacoma, before hopping on a bus. “I’m glad they’re not going to cut it.”
Kayla Miller catches the first bus from her home in Tacoma at 5:30 a.m. to get to drill team practice for Junior Reserve Officer Training Corps at Wilson High School.
“I was worried about the cuts … that I wouldn’t get to drill team,” said Miller, 17, a senior at Wilson High in Tacoma.
“It’s great news,” said Miller, who doesn’t have a driver’s license. “It matters to me because I take the bus all the time.”
Mark Holt, a disabled veteran who lives in Tacoma, said he was scared the cuts would prevent him from catching the bus home.
“That’s wonderful because there’s a lot of people that don’t drive and ride the bus,” said Holt, 58. “That makes me feel better.”Steve Maynard: 253-597-8647 firstname.lastname@example.org @TNTstevemaynard