RTA budget forces cuts in bus service, airline guarantees

Considering possible November tax question

Financial woes are forcing the Gunnison Valley Regional Transit Authority (RTA) to make major cuts to its ground and air programs. Bus service running between Gunnison and Mt. Crested Butte will be cut in half and the money available to help guarantee airline seats will shrink from $600,000 this past year to $325,000 in 2011.

The RTA readjusted its budget to anticipate a 15 percent drop in revenues for the coming year. The fund balance has shrunk to just $44,000. “This is making me nervous,” RTA executive director Scott Truex told the board at its March 26 meeting.
Mt. Crested Butte representatives on the RTA Bill Babbitt and William Buck argued that the budget should be based on an anticipated 10 percent drop in revenues. They were looking for ways to boost the amount of money to be used to guarantee airline flights. But the rest of the board, while agreeing to prioritize money for airlines, felt it was best to be conservative and work off a budget with a 15 percent decrease.
“The scenario with a 15 percent decline in anticipated sales tax revenues takes away from both air and ground,” explained RTA chairman Jonathan Houck. “It is where we are at. It is reality. Would I like to up the airline guarantees? You bet.”
Babbitt said, “Based on the proposed budget at that level, the money set aside for air is only slightly more than money set aside for the buses.” The budget called for $275,000 to be set aside for airlines. “Historically it’s been at about a 70-30 split favoring airline guarantees. I think we really need to look at what drives this economy. Will having buses running up and down the valley drive the economy or will airline seats drive the economy?”
Mt. Crested Butte Town Manager Joe Fitzpatrick said if airline seats are sacrificed, his town would feel the brunt of the reduction. “If we continue to reduce airline seats, I guarantee Mt. Crested Butte sales tax revenues will continue to decline. It becomes a spiral.”
Houck said the people living in Gunnison support the RTA primarily for bus transportation. “Gunnison voted in favor of the RTA the last time in 2008 because of the buses,” he said. “I have a responsibility to represent my constituents and the bus system is important to the people down here.”
“I disagree,” responded Babbitt. “Air is more important.”
“We need to try our darndest to get the airline guarantee money increased,” said board member Jim Starr.
“We all want to try to find ways to increase the air service and bring that number up as much as possible,” said Houck. “I think everyone on the board wants to prioritize air if other funds become available.”
In fact, with the board decision to not pursue a park-and-ride at Cement Creek Road (see story page 7), the board added another $50,000 to the airline guarantee line item, bringing up the budgeted RTA contribution to $325,000.
Bus service will be reduced to three round trips per day between Gunnison and Mt. Crested Butte during the spring, summer and fall. Next winter, the service will be reduced to just six trips per day.
The board is considering the idea of charging bus passengers, which could raise as much as $50,000. “We would lose some ridership if we charge, but if we reduce service in the winter, we may need that,” said Truex.
Another idea being floated is to go to the voters this November to pursue a sales tax increase. Currently, the RTA is funded through a .35 percent sales tax in the city of Gunnison and a .6 percent sales tax in the rest of the county. The tax generates about $1 million a year but its revenues are declining. Discussion has centered on trying to raise the tax in Gunnison to the .6 percent figure or have the entire sales tax increased to 1 percent across the board.
The RTA held two focus group meetings this month with business leaders at both ends of the valley. When asked if they thought a sales tax increase would be supported and passed in the fall, reported board member Starr, who attended the meetings, there was a resounding no from the Gunnison focus group, and a less strident “no” but still a negative reaction from the group in Crested Butte and Mt. Crested Butte.
Board member William Buck said he felt the focus group question was pretty superficial and more questions should be asked.
“It comes down to timing,” said Houck. “Most feedback I get is that in this economic climate, now is not the time to ask for a tax increase.”
“Mt. Crested Butte would be in favor of moving forward with an election to either equalize or raise the sales tax,” said Buck, who is also mayor of Mt. Crested Butte.
Babbitt said he would like to see how much revenue is generated for the county by people who fly into the airport. “Can we get an economic impact analysis so people understand what it means to them?” he asked.
“If we go in the direction of an election, the educational piece would be very important,” said Houck. “But people still vote with their checkbook many times.”
“We definitely heard concern about taking on another tax, and businesspeople are concerned that the taxes would get too high and they would lose business,” said Starr.
The board agreed to gather more economic impact information and make a decision by May on whether or not to try a tax increase.