> Metro’s rough estimates suggest a 20-cent fee on each trip could bring in $401 million over a decade, while a $2.75 fee could raise $5.5 billion.

Hmm, $401 million / 20 cents * $2.75 = $5.51 billion.

Is there some "law" that public transportation officials never account for the fact that increased fares or taxes will reduce demand?

Maybe most people don't care, but I find it hard to take seriously anyone who doesn't believe in price elasticity of demand. Perhaps they are ignorant of economics, or perhaps they are so well off that that $2.75 isn't worth counting. Either way…