Leaders of San Diego County’s public transit system balked at a proposal recently that would have potentially reduced its estimated $80 million annual budget deficit.
The board of the Metropolitan Transit System rejected a proposal that would have cracked down on fare jumpers on the San Diego Trolley — something the agency says is costing them about $1 million a month.
Unlike most transit systems in the U.S., the trolley is already on the honor system without any turnstiles. MTS uses officers to check if engers paid but, as of 2021, the fee for not paying is only $2.50 if they pay immediately.
The proposed crackdown would eliminate the ability to just pay the fare owed and force fare jumpers to pay a $25 fine. They could, however, complete three hours of community service instead.
Some advocates have argued a transit system is a public service and doesn’t need to be profitable. The nation of Luxembourg has made all public transportation free and other cities in the U.S. have parts of their system free, including Kansas City, Richmond and Tucson.
Q: Is operation of the San Diego Trolley sustainable without a crackdown on fare evasion?
Economists
James Hamilton, UC San Diego
NO: A system where people only pay if they want to is not sustainable. Moreover, if rules are not enforced, it encourages a chaotic and lawless environment in which many paying customers will not feel safe. Concerns about what you may have to deal with when you get on the train are a major factor undermining the success of public transport in cities like San Francisco and Chicago. Let’s not allow that to happen here.
Norm Miller, University of San Diego
NO: Most fixed rail transit systems rely on public subsidies, and addressing fare evasion alone won’t significantly alter the operational deficit. A crackdown may calm the disdain some people have over literal free riders. Expanding accessibility by creating a broader network of lines that run more frequently would encourage more people to use public transportation, potentially reducing road congestion, but would take decades to accomplish.
David Ely, San Diego State University
NO: The agenda for the most recent MTS Board of Directors meeting reports that the evasion rate on the trolley was below 3 percent prior to 2022 but jumped to over 32 percent in early 2024. Fare evasion will result in an estimated loss of $10 million to $13 million in revenue in 2024. This amount could grow as more riders learn that there is no penalty for evasion. Revenue losses of this magnitude will be difficult to absorb.
Caroline Freund, UC San Diego School of Global Policy and Strategy
NO: The trolley system is losing too much money, too fast. Reduced fares already exist for people with limited resources, so access is not a reason to avoid punitive fines. Even a $25 fine is probably too low to encourage payment. Given a 5 percent inspection rate, a $25 fine would yield only $1.25 on average per free rider, half the standard fare of $2.50. Building turnstiles would better discourage fare evasion, while improving much-needed security.
Kelly Cunningham, San Diego Institute for Economic Research
NO: The heavily subsidized trolley is arguably unsustainable with or without the fare as presently constituted. Positive and negative incentives are fundamental to economic behavior and significantly drive human actions. Trolley s have considerable concerns over frequency, safety, crowding and reliability as well as price of fares. Without positive incentives to maintain and operate the trolley, the value of using it greatly diminishes. Paying reasonable fares for the efficient operations of the trolley should be enforced.
Lynn Reaser, economist
NO: The trolley system is a critical part of the city’s plan to provide public green mass transportation. However, it will never be financially sustainable with fare evaders costing $1 million a month. A new fare collection system to cut the evasion rate from its current 34 percent is essential. Converting to a new system where the shrinkage rate returns to about the 3 percent prior to 2022 could make the system viable with continued public subsidies.
Alan Gin, University of San Diego
NO: There is some argument that public transit has positive externalities and should be subsidized. But, with local governments experiencing budgetary difficulties, a complete subsidy is probably not fiscally viable. Some revenue from fares needs to be brought in. If there is no penalty to skipping paying fares, that will only encourage more fare jumping and discourage those who honestly pay fares. A fine or community service will lead to more revenue being generated and strengthen the system.
Executives
Chris Van Gorder, Scripps Health
NO: Sadly, costs throughout California are among the highest in the nation and taxes are the highest. While I wish we could afford to subsidize everything, I think we are starting to hit our limit. Given the condition of the state budget as well as proposals to increase local and state taxes and request taxpayer approval to borrow more money via bond sales for multiple initiatives, a good place to start on trolley costs is a crackdown on fare evasion.
Jamie Moraga, Franklin Revere
NO: It isn’t sustainable unless riders are paying, or the government is subsidizing. If it’s the latter, then the taxpayers will be holding the bag. MTS losing approximately $1 million per month on fare jumping is astounding, especially with their significant deficit. Fare evasion has leaped from an estimated 3 percent to 32 percent due to the failed fare forgiveness program, which incentivizes riders to not pay as the penalty is cheaper than a ticket. This loophole should be rectified immediately.
Haney Hong, San Diego County Taxpayers Association
NO: But let’s not kid ourselves about what makes an enterprise financially sustainable. In general, public transit systems are subsidized by taxpayers, and farebox recovery rarely amounts to more than a third to a half of total costs. MTS is one of the better if not the best west of the Mississippi in of farebox recovery, but even with that in mind, there absolutely should be ability for fare evasion — we’re not some lawless state.
Phil Blair, Manpower
YES: The question is how high the subsidies will have to be. Depending on the trustworthiness of the trolley enger it is often more expensive to enforce ticket purchase, then the hopefully minor abuse. There does need to be continuing spot checking of tickets over time or no one will purchase a ticket.
Gary London, London Moeder Advisors
YES: I think the bigger issue is how operation of the trolley is sustainable with its low ridership counts. It is a subsidized transit system, so some slippage in fare collection probably is not much of an added financial burden. The system has much bigger issues than this: namely, how to create a viable public transportation system that people would actually use. Methinks the answer is not fixed rail.
Bob Rauch, R.A. Rauch & Associates
NO: I have no problem providing vouchers for low-income families needing free or discounted transportation. However, able-to-pay riders should pay the full fare or be fined an amount that hurts significantly more than paying the original $2.50. The MTA’s Pronto app is less effective than other cities’ systems. Fix the system, tighten controls, and work on helping low-income riders get where they need to go.
Austin Neudecker, Weave Growth
YES: Public transit should be inexpensive, safe and accessible. Such systems increase the available labor pool, facilitate large events, and alleviate parking and traffic woes. With these societal and financial benefits, I am not convinced the system must be self-sustaining. Today’s fares and es are reasonable. The app makes paying easy. MTS needs additional staff to check tickets and manage unhoused or unruly riders. Let’s prioritize increasing ridership and safety, then assess the system’s impacts in their entirety.
Not participating this week:
Ray Major, SANDAG
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