Howard Transit looks to save money at the pump

Bus system administrator hopes to save $200,000 by classifying fuel that vehicles use as government purchases and avoiding taxes

October 07, 2005|By LARRY CARSON | LARRY CARSON,SUN REPORTER

Like all of us, Howard Transit would like to save money on expensive fuel, and administrator Ray Ambrose thinks he may have found a way - by using government diesel fuel to avoid taxes private buyers pay.

Ambrose, administrator of the county-subsidized 26-bus system, said that if it's technically feasible to isolate the diesel the buses use, he hopes to save about $200,000 by avoiding fuel taxes this fiscal year.

"I'm very optimistic" that the idea could work, Ambrose said.

Ambrose said the bus system buys fuel under a private contract with Yellow Transportation, but the contract includes a fuel price escalator for rising diesel prices.

If the bus fuel can be classified as a government purchase, the tax portion of the price can be avoided, saving 48.75 cents per gallon.

"In the scheme of things, it's a $10 million annual budget. It's not a huge number, but it's the equivalent of running one bus route five days a week for a year," Ambrose said.

At the same time, ridership increases over the last month or two are producing about $10,000 a month more in fare box revenues, Ambrose said.

Howard County's gas pumps aren't equipped to handle the buses, but Ambrose hopes to get exclusive use of a 10,000 gallon tank at the Savage bus depot owned by Yellow Transportation where the fleet of bright green buses are maintained and get fuel.

"We cannot use the county pumps. They just don't have the volume," Ambrose said.

County transportation planner Carl Balser said he has no objection to the concept, especially because the system is under state pressure to cut costs and improve revenues.

"Obviously fuel costs are escalating quickly. If we can do something to hold down that part of the cost, we're going to try to do it," Balser said. "I don't think this is an uncommon practice."

The state tax on diesel is 24.25 cents a gallon, and the federal levy is 24.5 cents. Kevin Kane, a spokesman for the state comptroller's office, said local governments must pay state taxes on diesel, but the money would be refunded for a public bus system.

If the idea will work from a technical standpoint, Balser said, he will seek approval of the plan from officials higher in the administration of County Executive James N. Robey.

Bus rider Bradley Thomas, 50, of Long Reach said he is unimpressed with the cost-saving ideas.

"Good for them, but what about us?" he said, waiting in a bus shelter behind The Mall at Columbia this week. "I've got a car, but I don't drive it because of the price of gas."

Thomas, who lives on a fixed income because of a spinal condition, said traveling by bus is difficult because of long waits, but he has little choice.

Bradley said he left Long Reach at 10:30 a.m., saw a lawyer near the mall and at 1 p.m. was waiting for a bus to Ellicott City for a medical appointment.

Another rider, Zeeshan Siddiqui, 18, of North Laurel, said he left Long Reach High School on the same bus that Thomas rode to the mall. He was waiting for a bus home and then would take another to work at a Wendy's on U.S. 1 in Elkridge. But when Siddiqui gets off at midnight, there are no buses running and he must catch a ride home, he said.

"They need more buses on these lines," Thomas said.

larry.carson@baltsun.com

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