Sunday, January 7, 2001
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Posted on: Sunday, January 7, 2001

On bus fares, set subsidy policy first

Like clockwork, the launch of budget discussions at Honolulu City Hall inevitably turns to bus fares.

And so it has again this year, with Council Chair Jon Yoshimura suggesting the City Council should look at an increase in at least some bus fares as it seeks to write the 2001 budget. Fares were last adjusted in 1995.

It is true that the fare-box "subsidy" for bus operations in Honolulu is low by national standards, particularly when one takes into account special deals such as the senior citizen pass.

But simply raising or adjusting fares to meet norms set elsewhere is not good policy. It is equally poor policy to look at hiking bus fares as a quick way to save some money in the city budget for other expenses.

Bus fares must be considered on their own merits and in the context of the city’s overall philosophy on public transportation.

At one end of the spectrum is the argument that public transit is a service, a utility if you will, that benefits all of us whether we use it or not. This might lead to the conclusion that the bus should be free.

Experience suggests, however, that this approach carries within it the seeds of failure. We tend to value anything according to what we pay for it. A free bus service might be over-utilized, killing its usefulness.

The other end of the spectrum suggests that only users should pay for their transportation service. This would drive fares sky-high and would almost certainly force most riders into alternatives.

The best approach is a middle ground, where fares are rationally set and based on a clear understanding and established policy on how much subsidy should come from the taxpayers.

Once that decision is reached — what percentage of costs should be subsidized — then the process of setting fares is relatively simple.

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