RTD expects its sales and use tax receipts for all of this year will decline 9.6 percent, or $23.7 million, from last year’s total, according to the agency’s latest financial report.
For the first six months of 2009, the actual tax decline was 14.7 percent.
“You can see the impact of the recession setting in,” Robert Merriman, Regional Transportation District manager of budget and financial analysis, said in a briefing to board members Tuesday night on RTD’s fiscal condition.
Merriman and RTD chief financial officer Terry Howerter outlined the latest options to reduce the deficit next year, including a possible fare increase, reductions in bus and light-rail service and a continued freeze in the wages of salaried employees.
There was little or no support from board members for a fare increase in early 2010, which, if enacted, would follow fare hikes in January 2008 and January 2009.
After board members assessed the various options for financial relief, officials said they would explore a package that would not include a fare increase, but would consider limited service reductions totaling less than $1 million and likely tapping part of RTD’s $18.8 million operating reserve to help cover the deficit.
The agency also will seek “voluntary,” unpaid furloughs from employees.
Some board members noted that many public employees at the state and local levels have been given involuntary furloughs, in part as a way to avoid layoffs, and RTD should consider asking for similar sacrifice from its workforce. Over the past year, unpaid furloughs have become a popular cost-cutting move by private companies as well.
One uncertainty is the impact of the plunge in RTD’s sales and use tax collections on the agency’s FasTracks program.
The taxes account for about 60 percent of operating revenues for RTD’s current transit system, and they are counted on to fund the bulk of construction and operation of FasTracks trains.
RTD’s latest analysis shows it will cost $7 billion to build the six new rail lines and other transit improvements, yet for now, the agency has identified only about $4.7 billion in revenue sources for the project.
This analysis assumed a sales-tax decline of 3.5 percent this year and a rapid return to sales-tax growth of 5 percent or more each year beyond 2015.
Financial consultants hired by the Denver Regional Council of Governments say there is “still substantial uncertainty” about RTD’s revenue predictions for FasTracks.
