Reduced sales tax forecast prompts review of DART operations, future capital projects

Written by jrood

Lagging sales tax receipts resulting in lower long-term revenue forecasts in the 13 member cities are prompting Dallas Area Rapid Transit (DART) to review all expenses including operations, administration and future capital projects, officials said.

"The current
projection for sales tax receipts in fiscal year 2010 will be between $15 and
$20 million below our original estimate of $387.8 million," DART
President/Executive Director Gary Thomas said. "Combined with lower than
anticipated sales tax receipts last year, and significantly reduced 20-year
sales tax projections, we will have to evaluate all future expenses."

Updated 20-year sales tax
projections provided by economist Ray Perryman show DART receiving
approximately $3 billion less in sales tax income than the amount he projected
as recently as May 2009. The revisions take into account not only the effect of
the current economic downturn but also a comprehensive assessment of population
and employment growth rates within the 13 member cities as compared to growth
rates for the more rapidly growing emerging suburbs outside of the DART Service
Area.

"Our current situation
is not unique," Thomas added. "The weak economy is creating
challenges for all businesses, public agencies and the customers they serve
across the region and around the country. Unlike many we’ve been able to
maintain quality service and keep our expansion on schedule. Fortunately we
have financial controls in place to give us an early warning and let us start
working on the hard choices we are going to have to make over the next several
months."

Thomas said the schedule
for the planned bus purchase is not affected by the financial information. In
addition, the DART Rail Green Line, and the Lake Highlands Station on the Blue
Line, will open as scheduled in December 2010. The Blue Line extension from Garland
to Rowlett will open as scheduled December 2012.

In February, DART officials
said the opening of the first two sections of the Orange Line from northwest
Dallas to Irving may be delayed due to schedule problems with the Texas
Department of Transportation’s SH 114/Loop 12 construction. The timing of those
sections of the Orange Line will not be affected by the latest financial
development. DART and TxDOT officials are continuing to review the schedule in
an attempt to maintain the original opening dates to Belt Line Station.

Thomas said all aspects of
the agency’s operations and future capital expansion are being reviewed and no
decisions have been made. The Board will receive regular updates leading to the
preparation of the fiscal 2011 budget. The Board is scheduled to approve a new
budget in September.

More than 75 percent of
DART’s income is from the collection of the one-percent sales tax in each of
the agency’s 13 member cities. Other revenue sources include passenger fares,
interest income and federal funds. Sales tax receipts are also used to secure
debt to fund major capital projects. Sales tax data is monitored regularly and
the budget is adjusted as needed.

DART collected $378 million
in sales taxes in fiscal 2009. The original sales tax projection for fiscal
2009 was $431 million and then revised downward to $385 million in May 2009.

To guide long-range
planning DART develops 20-year financial and system plans. These two plans are
reviewed and approved by the Board of Directors. Projects are not added to the
system plan unless funding has been identified. The cost of designing,
building, operating and maintaining the project is then included in the
financial plan and divided according to the amounts needed in a specific year.

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