Councilmember makes misleading statement on Metro's tax revenue

April 8, 2014

Last week, in urging the public to accept his proposed increases in regressive sales tax and car fees, Councilmember Phillips said:

"The sales revenues that support our transit system are less now than five years ago."

This carefully-worded statement is misleading to the public in two ways. First, Councilmember Phillips qualifies his statement in order to hide Metro's revenue windfalls this year and beyond.

Actually, sales tax revenues are higher today than ever before. In 2007, Metro sales tax revenue was $442,042,000. In 2013, Metro sales tax revenue was higher, $442,731,000, and is set to boom in coming years. In 2014, Metro is collecting $471 million, well above pre-recession levels, and landing the agency a $32 million windfall above estimates. In 2015, Metro officials expect another banner year, and plan to collect $496 million, or $54 million more than pre-recession levels.

Second, Councilmember Phillips limits his statement to only "sales revenues" in order to avoid informing the public about Metro's other significant sources of money. Since 2010, officials have diverted county property taxes to Metro, giving the agency new tax revenue of $24 million in 2012. And Metro officials report receiving significant money from the federal government, more than $100 million in 2012.

Metro is realizing all these financial gains under current tax policy. Without Proposition 1's regressive tax increases, Metro officials will receive record levels of revenue in 2014 and in the years ahead. Still, Councilmember Phillips and other county officials are threatening to cut bus services by 17% if they don't receive money beyond the increases they are receiving through current taxes. These cuts would fall hardest on those who can least afford it - the poor, the disabled, the elderly and the unemployed.

Budget data reported by Metro shows that if Proposition 1 does not pass the agency's revenues will continue to rise. With good management and by opening a conversation with influential executives at the agency's powerful unions, county leaders could withdraw their threatened cuts. That way they could keep serving the most vulnerable in our communities without raising regressive taxes on everyone.