As a community, Seattle has been struggling with numerous issues like income equality, our world-class congestion, and the regressive nature of our tax system. One way to effectively deal with these issues is by implementing a fare-free transit system.

A fare-free system can quickly and significantly allow low-income people to have more disposable income, reduce traffic congestion by getting more commuters on buses, and reduce the regressive nature of our high sales taxes.  

Having an effective public transit system is directly correlated to an improved quality of life in our region. The community can more effectively be promoted when mobility restrictions are loosened, especially for transit-dependent populations including the elderly and low-income households. Additionally, fare collection and enforcement that currently costs millions of dollars would disappear along with the slowdowns and confusion that is inevitably caused by fare collection. Transit would be faster thanks to faster boarding, encouraging yet more ridership, and free transit would encourage tourists to ride transit rather than use services like Uber and Lyft that feed congestion.

The current subsidy level of our region’s transit agencies is already 70% to 80%, mostly coming from a sales tax, which again has a regressive incidence since low-income folks spend a larger share of their money, while the wealthy tend to save and invest. In King County, 23% of sales tax revenue is earmarked for King County Metro and Sound Transit operations and capital projects. Adding a simple payroll tax is a progressive and practical alternative to fund Metro and Sound Transit operations.

A small payroll tax, designed to a large extent like the Social Security and Medicare taxes that we already pay, could fund all Metro and Sound Transit operating costs, and, like them, are shared by employer and employee (the first $30,000 of employee income would be exempt from the tax to protect low income households). The tax revenues would be explicitly earmarked to Metro and Sound Transit operations and the maximum tax rate fixed so that it could not be raised above a certain level without a vote of the people.

In 2019, a 1% payroll tax on employers and employees in King County would generate $2.15 billion dollars (based on expected King County payroll using U.S. Bureau of Labor Statistics data). If Snohomish and Pierce County payroll were added, the number increases further–those two counties have employment of nearly 600,000 while King County’s employment is almost 1.4 million. Combined Metro and Sound Transit operating costs for 2019 are $1.26 billion, so even with a 30% increase in service, which would be necessary to accommodate a certain increase in ridership, the funding is more than covered.

Commuters in Lynnwood wait in line before boarding. (Bruce Englehardt)
Commuters in Lynnwood wait in line before boarding. (Bruce Englehardt)

To stay current, the $30,000 tax exemption could be indexed to the Consumer Price Index. A payroll tax like this would increase as county employment and average wages increase and would be much more stable than relying on sales tax receipts, which are prone to crater during recessions. Metro funding from sales tax decreased 12.94% during 2008-2009 while county payroll during the same time period only decreased 3.3%. This is crucial because transit demand tends to increase during recessions as people try to lower their transportation costs to make ends meet, but transit agencies are often forced to cut to make their budgets balance.

When the transit system is already heavily subsidized, transitioning to a fare-free system is not as drastic of a change as people might think. It is worth noting that farebox revenue in 2017, not accounting for the many costs associated with collecting and enforcing the fares, totaled $161 million for Metro and $90 million for Sound Transit.

The idea of abolishing fares is often criticized for making a negative impact on the financial stability of public transit networks, as it reduces farebox revenue to zero while increasing costs associated with higher passenger demand. But if we decreased the Metro and Sound Transit portion of sales tax by 65%, leaving the remaining portion for capital projects, while adding the 1% payroll tax, someone earning $100,000 per year would pay just over $3.00 per week, less than the cost of a latte.

If it seems utopian, it isn’t. There are two transit agencies in Washington with no fares, approximately 27 in the United States and almost 100 in other countries. Luxembourg, with a population of 600,000 will be the first country in the world to be completely fare free beginning in 2019. Even Paris, a city of 2.2 million, is currently undergoing a feasibility study to eliminate all fares.

It is important to distinguish the difference between eliminating fares to incentivize public transportation use with eliminating fares and increasing service. It has been demonstrated in transit departments all over the world that people will not ditch their cars if public transportation takes almost twice as long as driving, no matter the costs of the public transportation. This proposal is unique in that it provides the funding necessary to do both.

Increasing service and eliminating fares would benefit four specific stakeholders:

  1. Taxpayers who want faster commutes, cleaner air, and a more equitable tax system;
  2. Transit agencies striving for operational efficiencies and increased ridership;
  3. Current transit riders who depend on frequent and on time service to get to work; and
  4. Solo commuters who currently don’t have enough incentive to leave their cars at home.

Overcrowding may occur if ridership increases quicker than our ability to bring on additional service. It takes time to hire new drivers and purchase new buses, not to mention a place to park the bus when they’re not in use. But with some planning and a little time, an equilibrium could be found so current riders aren’t pushed away. These cost increases are expected and are more than covered with the payroll tax.

King County Metro has seen more growth in the past year than any large transit agency in the country, and it should be applauded. We have also seen incredible population growth in the region that is only worsening gridlock.

Multiple transportation groups are pushing for equitable solutions to get more people out of cars. Many positive steps have been taken that are showing promise but the problem will persist until a fundamental change in the way transit is funded is introduced.

This proposal will not be absent challenges; for the most part, preparing for a large increase in ridership and getting the full commitment of the organizations involved. But it is clear to us the benefits far outweigh the costs. Transportation is a basic function of a city because everybody benefits if everybody can easily make their optimum number of trips between home, work, shopping, events, medical appointments, and visiting family and friends.  

Fare-free transit is something we should carefully consider. It is affordable and would have huge benefits for the region, not the least would be an immediate and tangible benefit to low-income families who have trouble making end’s meet.

The featured image is by Bruce Englehardt.

David Gordon received a degree in policy studies from the University of Washington, Bothell. He now works as a policy analyst focusing on transportation issues. He drives, takes the Sounder, and the Link, every morning, to get to his office in Seattle.

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13 COMMENTS

  1. It won’t be free transit if the riders don’t pay for it. If transit is paid through a tax then people who don’t use transit are paying for it and it is not free. People who ride transit are basically riding it paid for by other people’s money, still not free. If you use transit, pay for it. Keep it simple.

  2. I think fare-free transit is a wonderful goal, but I have what is perhaps a crass, and maybe even Machiavellian, response to the idea of paying for it with a payroll tax. That is, I think a lot of people aren’t going to feel like it’s the same as Social Security, Medicare, state unemployment insurance, state workers’ compensation insurance, or state family and medical leave.

    The problem, as I see it, is that policymakers can’t frame the tax as an insurance premium where taxpayers are essentially paying their own premiums for their own benefits. Social security “works” politically, I think, because the perception of many taxpayers is that they are paying an insurance premium for the possibility that they outlive their retirement savings. And I think, too, to many people the social security program has an acceptable social contract because the only way to be eligible for the benefit is either to work, or to demonstrate that you are unable to work due to old age or a long-term disability. I’m not saying that I necessarily agree with this line of reasoning, but I think there’s something to be said for designing social safety nets to be politically stable. (It would certainly be nice if the Affordable Care Act were so stable…)

    If there were a mechanism by which you could associate paying the payroll tax with some sort of “King County Transit Account” that made people feel like they’d already “paid” for their “own” transit pass out of their paycheck, then I think this could work, and would be very clever. But otherwise I’m skeptical it would last. Maybe I’m too cynical.

  3. Until Seattle can find a way to solve the homelessness crisis in this city, any plan that makes all transit free, effectively turns our transit system into roving homeless shelters. Think about it, if you had a choice between sleeping outside in the cold rain or riding back in forth on the light rail, what would you do.
    And if the goal is to get more commuters to use transit, the prospect of spending an hour in a small enclosed location with a group of people with higher levels of substance abuse and mental health issues (as well as not the best hygiene), could scare off more riders than the lure of a free ride.

    • Passengers can be required to get off a transit vehicle at the end of the line, and wait for the next one.
      But in general, don’t fall prey to “If we can’t solve every problem, we can’t propose any solutions.”

  4. David, do you know for sure that under State law the City or County could implement a payroll tax that exempted a certain level of income rather than a flat rate on all income?

    If yes I’d be very happy to hear it–from what I’be been able to suss out, I’m not sure, and my impression has been that “all income has to be treated the same.”

    This is a friendly question, I am pro-payroll tax for progressive purposes, the question is simply “what would it take to make it progressive!”

  5. > Overcrowding may occur if ridership increases quicker than our ability to bring on additional service. It takes time to hire new drivers and purchase new buses, not to mention a place to park the bus when they’re not in use. But with some planning and a little time, an equilibrium could be found so current riders aren’t pushed away.

    King County already can’t hire enough bus drivers to meet current demand. Why promise free service that can’t be delivered?

    • It is evident that implementation of a permanent fare-free system would take time to implement. You’re quoting the section where Mr. Gordon directly addresses your question and then asserting an issue that only exists now. Clearly ramping up service and capacity is something that should be factored into implementation of a new funding system, but as Mr. Gordon explains at length there are many reasons to consider fare-free transit with or without additional service and capacity. In any case, overcrowding is politically a good problem to have–it puts pressure on policymakers to act and expedite more service delivery.

      • Especially since many of those policymakers currently use transit. Witnessing overcrowding firsthand will do wonders for prioritizing transit on our roadways, for example.

      • It is a current problem that has no timeline or plan for a solution, and a problem that is already going to get worse as it is since Sound Transit, KC Metro, and every other agency in the area wants to increase service hours even after Link opens. But somehow they plan to do this without attacking the lack of manpower or vehicles or spaces to operate vehicles out of. In fact, some of the ST3 options will take Ryerson bus base out of operation, reducing the ability to provide more transit.

        Overcrowding is a good problem to have up to a point, until voters wise up and realize that throwing more money at transit only works for so long if you can’t hire drivers. Bus overcrowding is already terrible; on my old commute to work I would have to wait til the third or fourth bus to be able to get on, and yet substantial improvements keep getting overpromised and underdelivered (hello, Move Seattle.) What good is a free bus if you can’t even board it?

        We have already seen the unreliability and overcrowding of transit used as an argument. It may not hold water now, but substantially increasing overcrowding is not guaranteed to make transit a surefire win in the eyes of voters.

  6. Many great arguments here for implementing fare-free transit. The most compelling to me is the steps it would take toward closing the income gap. What are you waiting for, Seattle??

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