Neil McFarlane is TriMet’s General Manager.
Yesterday, I briefed TriMet’s Board of Directors on the outlook for our upcoming budget. I told the Board that we are in a time I am calling the “new normal.” A time when fiscal uncertainty has created the perfect storm, leaving us to face a $12 million to $17 million budget gap in Fiscal Year 2013 (our budget year that starts July 1, 2012).
Why? Three main reasons:
1. A stagnant economy—With employment in the region growing ever so slowly, our incoming revenue from employer payroll taxes (which make up over 50 percent of our budget) grows slowly too. While we didn’t have wild expectations, we were hoping to see that grow 4 to 5 percent next year. Reality has forced us to reduce our projected revenues by $3 million for next year.
2. Federal formula funds—There is a great deal of uncertainty over federal formula funds, which make up about $42 million in revenue to us. Who knows what will happen, but “automatic” reductions could go into effect and we estimate it could have about a $4 million impact on our budget.
3. The ATU (union) contract—The recent Employment Relations Board (ERB) decision removed from TriMet’s final offer certain provisions, so some cost reductions we were hoping to see will have to wait for a future negotiation. This could mean between $5 million and $10 million in our FY13 budget.
All this said, TriMet continues to be a service our community needs and wants. We face increasing requests for more and better service. The hard reality is that we cannot afford to expand existing service levels, and I’m awfully afraid our service levels will diminish.
As a rider, I know how important it is to preserve service but it is hard to see how some cuts can be avoided. These are not easy choices. That is why everything needs to be on the table: fares, service, internal efficiencies, and current fare discounts. We will need to examine our activities and investments carefully, and make sure we are confident about the value of every dollar we spend.
These are not easy choices. That is why everything needs to be on the table: fares, service, internal efficiencies, and current fare discounts.”
To give us added time to address these issues and make those tough choices, I have created a Budget Task Force that will begin to meet in November. Given our best budget assumptions, these key business and community members will be tasked with providing me suggestions on how to appropriately balance our budget. We’re starting this process earlier than normal, which will give us more time for input from taxpayers, riders, and other stakeholders. The budget itself will come together during the first half of 2012.
This certainly isn’t the news I was hoping to share, but it is important that I share with both employees and riders what is ahead.
Here’s a link to our news release about TriMet’s budget outlook and some more background detail in the presentation I gave to the Board yesterday (PDF).
I welcome your suggestions and comments as we look for ways to close our budget gap. We will begin a formal public involvement process shortly, but in the meantime, there are several ways you can weigh in:
Phone: 503-238-RIDE (7433), option #5
Mail: TriMet 2013 Budget, 4012 SE 17th Ave., Portland, OR 97202
WEIGH IN ON FACEBOOK: Thinking creatively, what ideas do you have that could help TriMet close its budget gap?