South Shore fare hikes coming this year; budget cushion has worn thin since pandemic
Fares for riding the South Shore Line are expected to increase an average of 10% later this year to make up for the financial hit the railroad has taken since the pandemic began.
In addition, state legislators will be asked to kick in an additional $26 million, President and General Manager Michael Noland said Monday. 'That would get us to a healthy point,' he said, for the next 10 years.
The railroad hasn't increased fares since 2018, he said.
Were it not for the pandemic and the big hit on ridership public transportation has taken since the work-from-home movement began, the South Shore Line would have been in good financial shape with existing fares, Noland said.
The railroad had cash reserves of six to eight months of operating expenses prior to the pandemic, he said. 'We have used that cushion to maintain ourselves,' so those reserves need to be built back up, Noland said.
The Northern Indiana Commuter Transportation District board, which oversees the railroad, approved a 2025 business plan Monday that factors in both the fare increase and the requested cash injection from the state.
The Indiana General Assembly is drafting its two-year budget now.
Before the fare increases are implemented, the railroad will hold public hearings in the four counties it serves – Lake, Porter, LaPorte and St. Joseph.
The actual fare increases will vary as the railroad factors in the impact on disadvantaged populations, Noland said. Currently, senior citizens, children and individuals with disabilities are offered half-price fares.
'We had planned regular fare increases prior to COVID, and then the floor was ripped out from under us,' he said. 'No one around the country has put in fare increases in the face of the drastically declined ridership, but given the fact that things have been pretty much stable, the stabilization of the ridership experience, and we put in the new service, we think it's time that we start some series of fare increases.'
Inflationary pressures far exceeding the ticket price have hit the railroad, too.
'We, like almost every other commuter property in the country and many other transits, are at the point where we're at a fiscal cliff,' Noland said. 'This is not new because our revenues have been so depleted because of lower ridership.'
'We have spent down our cash reserves to the point where without some kind of structural change in revenue from the state we will be at a point where our ongoing operations are threatened,' he said.
Noland's team began talking with leadership in the Indiana General Assembly in 2023 to discuss the situation. Legislators want riders to bear at least some of the burden of refilling the railroad's coffers.
Noland isn't certain he'll get the $26 million he's seeking from the state, but he hopes to get a big cash infusion.
Meanwhile, the railroad is watching expenses.
Labor contracts have been settled for the next several years, so the railroad has a much better idea what operating costs will be over that period.
Noland hopes the launch of the new West Lake Corridor service later this year, along with expanded operations resulting from the double track project along the lakeshore route, will also boost revenues.
He's carefully watching news about workers being ordered back to the office to see how that will affect demand for commuter rail service.
Off-peak and weekend ridership is strong, so Noland is planning an additional weekend train to accommodate it.
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