Kansas City won acclaim for free bus fares, but the money’s drying up. Who will pay now?

Reality Check is a Star series holding those in power to account and shining a light on their decisions. Have a suggestion for a future story? Email realitycheck@kcstar.com.

RideKC buses and paratransit vehicles have been a free ride since March 2020. Now the temporary federal money that made that possible is running out, and local officials are at a loss for who will foot the bill.

Might this mean the end of zero fare? That depends on whether the Kansas City Transportation Authority can close a $10 million gap with new funding from local, state and federal sources. They have no assurance that the money to keep rides free will be there in 2025.

The KCATA made that clear late last year when it raised the possibility of needing to reinstate fares, which led to a groundswell of public support for keeping transit free.

But what’s been left out previously is that the KCATA might have had a cushion to assure at least two more years of free fares, had Kansas City’s government lived up to its promise to fully fund its share of the program.

Kansas City Mayor Quinton Lucas won an award from the U.S. Conference of Mayors for the city’s support of zero fare as an example of the city’s contribution to fight climate change. On a visit here, President Joe Biden called it “a great idea.”

But the city never did put in additional dollars each year as promised to cover free rides, The Star found from examining city budget records, and the KCATA confirms that analysis.

The city also diverted $22 million from its half-cent public transit sales tax that would have supported the bus system — the equivalent of more than two years’ of free fares — to instead pay for new LED street lights.

That left the KCATA little choice but to make up for lost sales tax revenue with COVID-19 aid dollars that were held in reserve and are now running out.

No one had a plan to sustain zero fare beyond that.

Finding more dollars

Local officials were able to put off the question of how to pay for free fares in the long term because COVID relief money served as a lifeboat for the first few years.

“I don’t know that you can call COVID a fortunate situation, but because of COVID funding, we were able to take away the fare,” former KCATA commissioner Melissa Bynum said last month as she presided over her final meeting as chair of the 10-member board.

“Now I think everyone agrees the goal is to find out ways to replace those dollars.”

At that meeting, the board put on hold any plans to bring back the fares, for now.

The transportation authority’s administration headed by CEO Frank White III is searching for new sources of cash. And the KCATA’s board is seeking a better understanding of how zero fare came to be.

How was it supposed to be paid for? How long was it supposed to last? Board members seemed to have no answers.

Bynum was the only person who was on the board at the time when fares were eliminated, and even she could not remember all the particulars.

“We have to get to the bottom of that before we can start talking about implementing anything,” said commissioner Bridgette Williams, who was appointed to the board in October. “We’re operating in a vacuum based on information none of us have.”

One thing is beyond dispute. Zero fare wasn’t supposed to have been built on a mountain of COVID cash. The plan to eliminate fares on the RideKC bus and RideKC Freedom paratransit systems was born long before the pandemic filled hospital intensive care units and upended the global economy.

Money for free fares was an issue before COVID

It was only by cruel coincidence that fares were eliminated at the very moment that the city began to shut down.

At the time, one in five riders had free passes. Some employers provided them on the theory that bus passes were cheaper than building parking lots for their workers.

Former transportation authority CEO Robbie Makinen had also been encouraging school districts, universities and unions to provide free transit to students and veterans.

Kansas City took the next step by vowing to make riding the bus the same price as it was to ride the city’s streetcars, which had been free from the start in 2016.

“I don’t want to do it for any sort of national recognition, I want to do it because it’s the right thing to do,” Councilman Eric Bunch said at the time as co-sponsor of that resolution with Lucas. “I believe that people have a right to move about this city.”

In early December 2019, before COVID-19 even had a name, the Kansas City Council directed City Manager Brian Platt to find $8 million to cover the cost of free bus rides.

City Hall’s accounting trick

The budget that Platt submitted on Feb. 13, 2020 set aside $4.8 million to pay for zero fare buses and paratransit service, with the idea that the KCATA’s private and public partners would pitch in an equal or greater amount.

But the pandemic upset those plans. The partnership dollars dried up. And while the city continues to assert that it has set aside $4.8 million annually for zero fare, it’s always been an accounting trick putting a new label on part of the city’s standing contribution to the transit authority, not additional money.

“The $4.8 million line item for zero-fare transit was not an increase in funding,” current KCATA board chairman Reginald Townsend said in a written statement. “It is included in the total transit investment annually taken from the ½-cent public mass transportation fund.”

Townsend’s characterization is reflected in the city’s budget documents. The city has been collecting a 1/2-cent sales tax for mass transportation since the early 1970s, when the Missouri General Assembly gave the City Council the authority to levy it. Voters approved a separate 3/8th-cent tax 20 years ago specifically to benefit the KCATA. Those two sales taxes make up Kansas City’s yearly contribution to the regional transit system.

In the year before zero fare took effect, the city budget set aside $57.6 million in combined sales tax revenue for KCATA. This year’s budget set aside $55.5 million, which was minus the first of two $11 million instasllments diverted from the ½-cent sales tax fund to pay for streetlights.

The annual $4.8 million set-aside for zero fare? That’s where the accounting trick comes in. The budget deducts that from the total tax revenue that the KCATA would normally get and then adds it in as a separate line item.

City claps back

Contrary to Townsend’s characterization, Lucas’ chief of staff maintains that the city has provided full financial support for zero fare.

“The Mayor and City Council have approved budgets for years now which have included zero fare funding and entered into a contract with the KCATA for their provision of zero fare transit,” Morgan Said replied in an emailed response to questions from a reporter. “KCATA has agreed to provide zero fare transit as part of its annual contract, for which it receives substantial funding from Kansas City.”

But KCATA has no taxing powers to raise money to cover the deficit for zero fare. The federal government helps with the cost of buying transit vehicles and some operational support, but there’s no assurance that more federal funding can make up the difference.

White has lobbied both statehouses for addional funds, but has gotten no promises.

“We’ve been working hard in Missouri at the state level, and we’ve had a conversation with Kansas,” he said last month. “We’ve made significant steps in the last year and a half, but it’s still a process.”

At some point, the KCATA may again ask for support from organizations that were buying passes for their employees, students and veterans before zero fare, a KCATA spokeswoman said. But if it’s to continue, the zero fare program will need increased financial backing from the local governments RideKC serves.

Will Kansas City and others step up?

The bulk of the KCATA’s operating funds for buses, paratransit vehicles and the new Uber-like ride-hailing service called Iris come from those cities and counties.

There are only as many bus routes running as each jurisdiction served is willing to pay for. North Kansas City has a contract with the KCATA. So does the Unified Government of Wyandotte County and Kansas City, Kansas, as well as Riverside, Liberty, Gladstone and so on.

Kansas City, Missouri, is the biggest customer of all, providing more than half of the KCATA’s operating revenue.

Theoretically, all should be providing funding equal to the amount of service they receive, including the cost of going without farebox revenue. Where that hasn’t been the case in the past, the KCATA is making adjustments.

If that happens, zero fare pays for itself.

Platt will submit his budget for the upcoming fiscal year to the council on Feb. 8. It will include support of zero fare transit, and the policy will continue to be required in the city’s annual contract with the KCATA, which is up for renewal this spring, according to Said.

Michael Shaw, the city’s public works director and one of Lucas’ appointees to the KCATA board, said the future of zero fare comes down to one key question.

“If our goal is to close the gap, are we doing everything we can do to close the (funding) gap?”

And then Shaw, who was instrumental in arranging the streetlight funding agreement two years ago, said: “We have more work to do.”