Hawaiʻi County's Hele-On bus system will stay free for another three years.
Free bus rides are one of several ways the county's mass transit agency is trying to make public transportation a viable daily option for residents.
The agency recently doubled the number of vans in its paratransit fleet and is making strides toward a new transit hub in Pāhoa. It's also investing in micro-transit routes and new all-electric buses.
But rising operational costs have driven up the agency’s budget by 400% since 2018, and the agency is facing uncertainty over the future of one of its main sources of funds.
Public transportation on Hawaiʻi Island is primarily funded through revenue from the general excise tax surcharge. This year, the Hawaiʻi County Council voted to divert at least some of those funds toward affordable housing initiatives.
Can the county afford to forego revenue from bus fares?
Hawaiʻi County Council Member James Hustace chairs the Public Works and Mass Transit committee. He told HPR that the county has probably hit the ceiling on what it can spend on its bus system.
"It will be a challenge for mass transit going forward in terms of what we can achieve with the dollars we have, and where we need to redirect some of that as well," he said.
Hustace is supportive of expanding access to public transportation, but also thinks the county needs to address the growing demand for housing.
He voted in favor of the measure that allows the county to redirect some GET funds toward affordable housing.
Hawaiʻi County Mass Transit Administrator Zac Bergum said he hopes GET funding for his agency stays in place.
"We don't really want to have to cut back services to the community. We would definitely like to continue where we're at. But also continue to grow, because that's what it's all about," he said.
If that funding does get cut, bus fares likely couldn't fill the gap.
Fares brought in just $376,000 in 2021, which was the last year that the bus charged riders.
Bergum said that revenue would barely make a dent in the department’s expenses — the agency spends three times that amount on a year's worth of diesel fuel.
Ridership hit a low point in 2021. At that time, only about 325,000 people were taking the bus.
Thanks in part to free fares, ridership has climbed to about a million riders annually.
But if the bus started charging fares again today, Bergum expects that annual revenue would still be slim. He estimates fares would generate about $750,000, which is equivalent to just 1% percent of Hawaiʻi County's transit budget.
At the outset, it might actually be more expensive for the agency to charge fares than to keep the bus free. Bergum informed the council that fare boxes with updated software would need to be installed in all of the county's buses, an investment that would cost just over $1 million.
Overall, Bergum said he doesn't view transit as a "money-making business."
“It's a service that we provide to the community,” he said.
But he said the transit agency is also being mindful not to dig too deeply into the county's coffers. He told HPR that the transit budget will remain the same into the next fiscal year.
Meanwhile, the transit agency has been pursuing state and federal grants to support transportation projects — including the next three years of free bus service, which will be funded through federal formula funds.
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