11/11/2011 05:37 pm ET | Updated Jan 11, 2012

Muni Rate Hike May Be In The Works As Agency Looks To Close Budget Hole

Fact: Muni needs money.

The San Francisco transit system is facing a deficit of $23 million this year, which jumps to $34 million for the fiscal year beginning in July 2012. The San Francisco Municipal Transportation Agency is looking at number of ways to close that hole without making cuts to service.

In preparation for Monday's meeting of the agency's governing board, Muni managers have floated a whole host new measures to generate revenue.

Some of the agency's suggestions include a 25 cent rate hike, charging riders a quarter to use a transfer, making parking fines more expensive, expanding parking meter hours to include evenings and Sundays, installing between 500 and 1,00 new meters, increasing the price for businesses renting out a parking space for a full day, charging businesses a fee for the operation of courtesy parking lots, raising the city sales tax, imposing a parcel tax and increasing the vehicle license fee.

"We're not recommending, at this point, any of these things," SFMTA Director Ed Reiskin told the San Francisco Chronicle. Reiskin, who was appointed by Mayor Ed Lee earlier this year, views these suggestions as a way to begin a conversation about how Muni can best dig itself out of its fiscal hole while testing the waters to see which proposals will be the least unpalatable. "There's not a single thing on any of these lists that anyone's really going to like," Reiskin admitted.

Some of these ideas, such as any of the tax increases, would have to go before voters whereas others, like the rate hikes, could be enacted internally without a protracted public campaign. The general apatite for increased taxation going towards Muni is likely low but, this being San Francisco, is also hard to predict.

Earlier this week, city voters rejected a sales tax increase while, at the same time approved a new parcel tax--although the latter was buried inside of a popular bond measure.

Reiskin told the San Francisco Examiner in September that "all options except fare increases" were on the table; however, as Muni's budgetary outlook has darkened since then, the agency has started to look more seriously at increasing ticket prices.

Other ideas coming from the agency in recent months are clamping down on the fare evasion that costs Muni up to $19 million annually and wrapping city buses in advertisements.

One major projected cost-saving measure, a new contract SFMTA struck with the union representing its some 2,000 drivers, has already gone into effect after a contentious series of negotiations. The contract, which includes a pay freeze and allows for the hiring for part-time workers, is expected to save the agency $21.3 million over its three-year term.

The agency's ultimate goal is to avoid a second straight year of service reductions.

As a result of significantly decreased funding at the state level, Muni instituted a ten percent service cutback last year. Even though a $15 million one-time injection of dollars allowed for the restoration of two-thirds of the service that had been cut, this reduction led to a drop in Muni's overall on-time percentage from the previous year--the first decease after five consecutive years of improvement.

While Muni's on-time percentage falls far short of the the voter-mandated goal of 85 percent, it's in the average range for other major metropolitan transit agencies whose vehicles are forced to contend with street traffic.

Even though this deficit only represents about three percent of the agency's nearly $800 million annual operating budget, Muni faces staggering a long-term deficit over $1.6 billion over the next 20 years.