RTAs greatly vary in the size of the service area they serve and the number of riders they have, leading to varying operating expenses and fare revenues. This section attempts to capture how each RTA performed in terms of their operating costs and how much fare revenue covered said operating costs.
Operating Expenses
Operating expense describes the cost for an RTA to operate a bus or van. Operating expenses can further be contextualized by looking at vehicle revenue miles (VRM) or vehicle revenue hours (VRH), which show what is the cost of “running” a mile or hour of revenue service. Revenue service includes trips that accept passengers and excludes “deadhead” trips, for example, moving a vehicle back to the garage after the last trip of the day.
Fixed-Route Service
From FY22 to FY23, operating expenses per VRH for fixed route bus services increased for eleven RTAs and decreased for four RTAs. VTA saw the biggest increase, at 27%, followed by GATRA at 22%.
Paratransit
From FY22 to FY23, operating expenses per VRM for paratransit services increased for five RTAs and decreased for ten RTAs. BRTA saw the biggest increase, at 28 percent, followed by MWRTA with a 17 percent increase.
From FY22 to FY23, Paratransit operating expenses per VRH increased for seven RTAs and decreased for eight RTAs. BRTA saw the biggest increase, at 34 percent, followed by BATA with a 15 percent increase.
Farebox Recovery Ratio
Farebox recovery is the ratio of the agency’s revenue from fares and passes to operating expenses. It shows how much of the agency’s operating budget is covered by fares, and, inversely, how much is covered by other sources (tax assessments, federal grants, etc.). Farebox recovery can vary from year-to-year based on ridership, increases in fares and changes in costs, but generally gives a picture of how much of an agency’s costs are covered by its users rather than additional subsidies.
Contributing factors to a slower rebound in farebox recovery ratio from pre-pandemic levels for some RTAs is the provision of fare free service. Some RTAs have made the local decision to operate fare free in some capacity which could include operating fare free systemwide, and/or targeting fare free services to certain days or time periods such as holiday seasons, or for defined ridership categories such as seniors. In addition to the use of Federal COVID Relief funds to support fare free programs, RTAS have also utilized $2.5 million provided in the Commonwealth’s FY23 budget to pilot means-tested, discounted or fare free transit programs. MassDOT approved funding for the 15 RTAs to operate fare free fixed route and ADA paratransit services for the 2022 holiday season. Branded as Try Transit, the program allowed riders to experience stress free travel during the holiday season, as well as support local economies and employment. MassDOT’s evaluation of the Try Transit Fare Free Pilot Program demonstrated that the program did result in a ridership increase for over half of the RTAs. The Commonwealth’s FY24 budget provides another $15 million to the RTAs to support fare free services and MassDOT will provide additional analysis of the impacts of this program upon its conclusion at the end of FY24.
Other post pandemic impacts on the financial picture for RTAs continued in FY23 to include revenue losses due to lower fare collections, reductions in own-source revenues generated through parking facility fees, and increased operating and capital expenses. Drivers of increased operating costs included fuel, inflation, and labor. Increased labor costs were due to higher wages and recruitment bonuses paid to attract workers in a highly competitive labor market. These labor cost challenges are not exclusive to RTAs, as this is a situation that many industries are facing in the post-pandemic era. To mitigate revenue losses and strengthen the RTAs’ finances, the Commonwealth has continued to provide increases in State Contract Assistance (SCA) funding each fiscal year, including additional earmarked funding for the Fare Free Program.
Fixed-Route Services
Paratransit
From FY22 to FY23, six RTAs recorded increases in their Paratransit Farebox recovery ratio, six RTAs recorded decreases.
