All Aboard: Financing a Fare-Free WRTA

The Worcester Regional Transit Authority Advisory Board has suspended fares at the agency since March 2020, as a result of the COVID-19 pandemic and subsequent emergency. It has been extended several times, and the latest extension is set to end at the end of June 2023 unless the Advisory Board adopts a budget that will extend fare-free for a longer period of time. The Worcester Regional Research Bureau previously released two reports: In May 2019, The Implications of a Fare-Free WRTA and in November 2020, Bureau Brief—Addendum to "The Implications of a Fare-Free WRTA." Both reports analyses found a strong argument in favor of a fare-free program at the WRTA. This report on finances serves as an update to those reports after three years of fare-free service.

• The Commonwealth of Massachusetts is consistently the largest source of revenues used for operating expenses, followed by, in FY22, the Federal Government, and then WRTA member community assessments.
• According to a 2018 survey of riders, 65% of riders had an income of less than $24,999.
• Collecting fares, whether fixed or variable, will entail costs of its own that may mitigate the revenues collected by restarting fares.
• A thought experiment of what different fare collection revenues could look like, including the possibility of discounting fares by income.
• The Massachusetts' Legislature and the new gubernatorial administration have expressed interest in increasing transportation funding across the state. Moreover, the Regional Transit Authority Caucus in the legislature has begun to put forward bills to raise statewide RTA funding to $150 million a year, nearly $55 million more than funding for FY23. Governor Healey's initial FY24 budget includes $96.8 million for RTAs, in addition to $6 million for operating expenses from a new $25 million grant.
• The Federal Government will be increasing its transportation funding until 2026.

The WRTA experienced a rapid ridership recovery from the COVID-19 pandemic and FY23 ridership is expected to increase. While this report reviews WRTA finances relative to sustaining a fare-free policy, please look forward to a forthcoming report on WRTA ridership from The Research Bureau. It is evident that a fare-free policy at the WRTA has had significant impact, particularly on ridership.