In principle and out of practicality, councillors should tell Halifax Transit to lift the cap on low income bus passes.
In a report coming Thursday to council’s transportation committee, Halifax Transit recommends against lifting the participant limit for its low income bus pass program, with a flimsy, alarmist claim that doing so could cost them $5 million in revenue.
First, some background.
As it works now, if you make less than $33,000 a year and can prove it, you qualify for the Low Income Transit Program (LITP), which means you can buy monthly bus passes for half price (for example, $39 for a conventional pass.) But in order to get accepted, you have to apply during the annual intake period and do so before 1,000 others. If you miss the cut off, you can add your name to a waiting list, so that in six months, as participants who did not end up purchasing passes get bumped off the list, you might get a spot.
For the 1,000 applicants accepted in the program, the LITP either means they can afford more transit service that year, or a small bit of their low monthly income is freed up for other needs.
Those who don’t make the cut-off face the status quo, and may have to opt out of purchasing passes as often or at all. When I last wrote about the LITP, I gave an example of someone I happen to know who did not make the cut:
Full disclosure: I know one of the people on the LITP waiting list. I don’t know her well, mind you. She is not me or a member of my family. But I do know that she had hoped to go to an adult education class three times a week this year. Unfortunately she didn’t get her application submitted before 1,000 others did (applications opened May 8 and the program was full by July 19), and so will forego the classes that would have required her to travel more often by transit.
I gotta ask: Why on earth would Halifax Transit not want to accept $39 a month from this person? Her income is less than $33,000. (She’s proven it!) She does not drive or own a car. Her alternative is not to just fork out the $78 for a regular pass, rather it is to buy as many bus tickets as she feels she can afford and budget her transportation accordingly. And if that means foregoing opportunities like adult ed classes, then so be it.
Something’s clearly wrong here, and the simplest solution is to lift the participant cap.
Do away with the cap, and you do away with the waiting list and its associated administrative costs. You also do away with the need for administrators to go in every six months and check to see which participants have not been purchasing passes, and then remove them, and then alert the wait-listers. With no cap, the administration of the program becomes simpler. Heck, if you made it continuous intake, you could even avoid having to hire temporary staff to handle thousands of applications all at once.
But unfortunately, Halifax Transit has taken the position that lifting the cap on the program could put them at risk of losing up to $5 million in revenue.
Let’s have a closer look at that number, because it’s a doozy. It seems to come from the rather fantastical suggestion that lifting the cap could cause a sudden, astronomical increase in demand.
And heck, it’s true, there are a lot of people with low incomes in Halifax. According to StatsCan data, “there could be approximately 105,300 individuals who could qualify for the Low Income Transit Pass program,” reads the report. “Due to the large numbers of residents that would be eligible for the program, removing the cap could result in a revenue loss of up to approximately $5,000,000 per year, depending on uptake.”
Depending on uptake, indeed.
Halifax Transit staff have concluded that each participant in the LITP represents a loss of $130-180 a year in potential revenue from full price pass or ticket sales (based on surveys where 54 per cent of participants say they previously purchased monthly passes at full price.)
Using that speculative figure, in order for the LITP to cost Halifax Transit $5 million per year, there would have to be between 28,000 and 38,000 registered program participants. And considering that Halifax Transit currently averages 10,500 pass sales per month, those numbers are absurd. And even Halifax Transit knows it.
The alternative they propose to lifting the cap is doubling the cap, which they partly justify based on the uptake they’ve seen so far in the six-month pilot project and the first year of the permanent program. Based on this observed uptake, reads Halifax Transit’s report, “the proposed cap of 2,000 is likely more than sufficient to meet demand.”
Okay. Here’s the thing. You can’t really make a good decision while believing both that a lifted cap begets 28,000 or more participants, while a raised cap begets fewer than 2,000. One of those numbers, maybe even both, are bogus.
For councillors, and everyone else, this should be a red flag that the argument behind this recommendation is just not sound.
But let’s reserve judgement on those numbers for a moment, to consider a universe where having 28,000 to 38,000 low income Haligonians qualify for $39 monthly transit passes is a bad thing.
Right now, an average of 710 people out of 1,000 participants actually buys a pass each month. At that rate, low income participants in an uncapped LITP program would be buying somewhere between 20,000-27,000 discounted passes a month.
So, were these low income participants ever to exist in such large numbers, they would triple our current pass sales (about 10,500). They would be spending somewhere between $9.3 and $12.6 million a year on bus passes. For reference, that’s about 28 to 38 per cent of Halifax Transit’s total annual revenue for fiscal year 2016-17. So, again, it’s an absurdly high number.
And even it it were a reasonable number, it’s really hard to think of that level of uptake being a bad thing. (What would tripling the number of pass sales do to ridership?!) But according to Halifax Transit, the problem would be that they otherwise would have spent $5 million more than that.
Let’s consider Halifax Transit’s alternative to lifting the cap: a larger, 2,000 participant cap. Is it really so terrible to double the cap on this program? Well no, of course not. Giving another thousand people more equitable access to transit is not bad in and of itself. But in yet another unfortunate recommendation, Halifax Transit suggests the cap should not be doubled until July 2019, leaving low income Haligonians scrambling for only 1,000 spots again this summer.
Whatever the number of potential participants out there, the cap on the LITP program is just wrong in principle.
The LITP program provides fair, or at least fairer, access to a basic public amenity. Though its purpose is equity-based, it’s not unlike other transit programs currently on offer by the city.
EPass and UPass
The EPass program offers a more modest discount to employees of participating organizations (only 12.5 per cent from Halifax Transit, with another 12.5 per cent supplied by the employer) but has no upward limit on the number of passes. What’s more, reports on the EPass don’t even calculate the “lost” revenue. Here’s how former city spokesperson Lucas Wide explained it in an email back in April 2017:
Most current Epass members did not buy annual passes for 12 months a year — most likely they bought a few monthly passes and complemented it with tickets, or cash. Some EPass members didn’t take transit at all before, so therefore any revenue from them is new. We don’t know exactly how much money people paid to take transit before becoming Epass members, so we can’t say exactly how the program has impacted our revenue.
Whereas Halifax Transit has estimated their losses on each participant of the LITP, no-one has bothered to even survey EPass members to find out how much money Halifax Transit is “losing” on them.
And then there’s the UPass system, whereby university students purchase passes en masse at reduced rates. Though caps are a moot point for the UPass considering it is a bulk purchase scheme, it’s worth noting that the discount for a UPass is north of 70 per cent, much higher than that on offer with the LITP, and it’s applied to tens of thousands of passes.
Neither of these schemes puts Halifax Transit at great risk. In fact both the EPass and the UPass help Halifax Transit succeed in its mission to grow ridership. The LITP is no different, and should be treated no differently.
Halifax Transit wants to limit participation in its Low Income Transit Pass program to protect the agency from an outlandishly argued worst-case scenario. Here’s hoping councillors, starting with the Transportation Standing Committee on Thursday [update: meeting moved to Monday, March 26, 2018], can see through the absurdity.
If the trade-off for the pointless layer of security offered by a cap amounts to the turning away of even one low income person who qualifies for the LITP and has gone to the trouble to prove it, it’s just not worth it.