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Denver Battles Fuel Prices with New Mass Transit Plan

June 20, 2008 at 6:50 PM EST
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In response to soaring fuel costs, Denver city planners are taking steps toward expanding the city's public transportation system.
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TRANSCRIPT

TRICIA STEVENS, Aurora resident: Outraged. It’s absolutely gotten me outraged.

SPENCER MICHELS, NewsHour correspondent: That’s what Tricia Stevens of Aurora, Colo., says about the prices she’s seeing at the gas pump. This single mother and grandmother decided she had no choice but to start using mass transit to get to her job at a university theater company.

To her surprise, the eight-mile commute by bus and bike takes about the same amount of time as driving, and she’s already seeing a dramatic difference in her pocketbook.

TRICIA STEVENS: I’m filling up a tank every two weeks now instead of every week. It’s $48 bucks to fill it up. So $48 every two weeks as opposed to $48 every week, that adds up.

SPENCER MICHELS: Carolyn Hammock and her husband have also made the switch, from driving two separate cars from their suburban home 20 miles south of Denver to taking light rail for both work and pleasure.

CAROLYN HAMMACK, commuter: One of the other areas where we have really changed is commuting downtown for sporting events. It’s not even a thought that we would take our own car anymore; we always use the light rail for recreational purposes.

SPENCER MICHELS: Ridership of Denver’s mass transit system is up 9 percent this year, and it’s a trend that’s happening in nearly every city across the country as prices at the gas pump have soared.

In Boston, subway ridership is up 9 percent; in Baltimore, light rail is up 17 percent; in San Antonio, bus ridership is up 11 percent; and in Seattle, the number of commuter rail passengers is up 28 percent.

Transportation expert Andrew Goetz.

ANDREW GOETZ, University of Denver: Well, we’re seeing changes. People are deciding to switch to other modes, to use transit more often, to bicycle, to walk, cut down on trips, more carpooling. It’s a real fundamental behavioral change that we’re beginning to see because of these higher oil prices.

Passenger numbers, fuel costs soar

SPENCER MICHELS: And while that's good news for transit officials, it also puts them under severe pressure.

Cal Marsella is the director of Denver's Regional Transportation District.

CAL MARSELLA, Denver Regional Transportation District: We are approaching capacity on a number of our buses and rail lines. And it's a paradox, because our costs are up because we use a lot of fuel. Our fuel prices are way up. So just at a time we want to put more service out, we really can't.

SPENCER MICHELS: Denver, which has both light rail and bus service, increased its fares by 25 cents to $1.75 in January, a year earlier than planned, hoping to help pay for the higher diesel costs, but it hasn't been enough.

The agency had budgeted diesel costs at $2.62 a gallon, but it's now in a contract paying 60 cents more than that. And the price is likely to go much higher.

Analysts have told transit officials they might be paying well over $5 a gallon for diesel next year. Marsella says every little increase has a huge impact.

CAL MARSELLA: Every penny that diesel goes up costs RTD $100,000. So we're still experiencing increases in costs; we're still scared.

Our current lock at $3.20 goes until December 31st. Then it's off. Now we're back in the marketplace. So we're really apprehensive about what's going to continue to happen with these diesel fuel prices.

Sales tax helps transit system

SPENCER MICHELS: And his agency has another problem: 75 percent of it is funded by sales tax revenues, and those have gone way down as consumers have tightened their belts.

CAL MARSELLA: They're putting so much fuel in their gas tank, they don't have money to spend on other items. We survive on the sales tax.

Our sales tax revenues are down over $8 million this year over what we've projected. So our costs are up; our revenues are down; and demand for service is up. It's a very difficult time for transit properties.

SPENCER MICHELS: By the end of the year, Denver's transit system will be facing an $18 million shortfall in tax revenues. Marsella says, in order to make that up and pay for higher fuel costs, they may have to curtail service and raise fares again.

Despite the problems caused by increased ridership, the trend is expected to continue. In fact, some people think the high price of oil will cause lifestyle shifts that go way beyond riding a bus or a train.

ANDREW GOETZ: One of the changes that I see happening if oil prices continue to rise as they have been is that people are going to be making very fundamental decisions about where they live, where they work, how they go about their daily lives, how many trips they make on a regular basis.

I think we're going to start seeing some fairly fundamental shifts in behavior that way that can have some pretty significant impacts on our cities and how they are formed, how they're shaped.

SPENCER MICHELS: Tricia Stevens has already begun making that fundamental shift.

TRICIA STEVENS: My goal eventually, I would really love to get rid of my car entirely. I'd love to live in town and just not have a car at all.

SPENCER MICHELS: She says, even in the unlikely event that gas prices would go down, she's not going back to her old car-driving ways.