With no end in sight to the pandemic-induced downturn in public transportation ridership, many Bay Area transit agencies are warily eyeing their operating budgets, which have been kept afloat by billions in federal relief money during the public health crisis.
Riders are not returning in force, and without their ticketing revenue, transit operators are burning through federal funds with hundreds of millions in budget shortfalls on the horizon. That means transit agencies are looking for new cash, and voters may be asked to foot the bill in the coming years if they want to avoid service cuts.
“Everybody is asking how long the runway might be for the federal money provided, and nobody knows the answer to that,” said Seamus Murphy, executive director of the Water Emergency Transportation Authority, which runs the San Francisco Bay Ferry. “Our fiscal cliff is imminent. ... It’s all dependent on how ridership returns.”
Nearly two years after public health lockdowns collapsed public transportation ridership overnight, transit operators around the country are acknowledging that many riders will not be back for the foreseeable future. Remote work has become permanent for much of the workforce, and rising COVID-19 case numbers and the omicron variant continue to push away would-be passengers from public transportation.
Impacts of the ridership downturn are particularly felt in the Bay Area for Bay Area Rapid Transit (BART) and Caltrain, whose financial backbone depended on funneling white-collar commuters in and out of San Francisco, where office buildings are still ghost towns.
Before 2020, BART prided itself on being one of the most passenger-funded major transit systems in the nation, with fares covering two-thirds of its day-to-day operating expenses. That equation made BART especially susceptible to the drop in passengers, with ridership still hovering at less than 30 percent of pre-pandemic levels.
“We were the gold standard across the country. We were able to operate without much assistance,” said Alicia Trost, a BART spokesperson. “That was seen as a best practice because you don’t have to rely on others. But with the pandemic, that funding model does not work.”
BART is seeing its ridership slowly increase, especially on weekends, but the agency is now projecting up to a $250 million operating budget hole starting in 2024. AC Transit could see a $50 million deficit, and the San Francisco Municipal Transportation Agency, which oversees Muni, is also projecting a possible $250 million shortfall. Meanwhile, the Santa Clara Valley Transportation Authority, which relies mostly on a sales tax instead of ridership to fund operations, is in a relatively stable budgeting position, even as the South Bay bus and light rail service shuttered service for over three months this year after a workplace mass shooting killed nine people.
Agencies say they will not be looking to cut service in order to make up for the budget shortfalls. According to BART, the majority of its costs are fixed regardless of service levels, but in a worst-case scenario, they can reduce train service to save some money, an option that advocates say would only exacerbate the ridership crisis. The cost savings from running fewer buses and trains wouldn’t fully make up for the loss in fare revenue, said Laura Tolkoff, transportation policy director for the urban planning think tank SPUR. “So you can’t cut your way out of this problem, nor do you want to, because you’re harming people who rely on transit and forgoing the opportunity to get riders back.”
Raising fares is another possibility to fill the gap, but transit agencies are loathe to further burden their riders. That means that in the coming years, transit agencies like BART and Caltrain are looking for some combination of regional tax increases, state-level funds and federal dollars to keep the trains, buses and ferries running. “The reality is, it’s a pretty big crisis,” added Tolkoff. “Our transit agencies are facing a dire financial future, and we do need new revenue sources.”
Last week, the Metropolitan Transit Commission, which oversees regional transit planning and funding, discussed one possible way to fill the looming budget shortfalls — by turning to Bay Area voters in 2024 to increase their taxes through a massive ballot measure.
Yet agencies face strong headwinds from voters to approve tax increases, which would require a two-thirds majority for approval. According to summer polling data by the commission, 62 percent of likely voters would vote against any tax increase, up over 14 percent from November 2019.
“Those were some very sobering numbers,” said Rebecca Long, the commission’s legislative manager. “We would really need to be polling again in 2024 to gauge as you get closer to the election: Does it still look viable?”
The outlines of a 2024 ballot measure — including the structure of any tax hike — are still up for debate, but the initiative could rehash a 2020 measure that was put on hold due to the pandemic. That measure, which never made it on the ballot, sought to raise $100 billion over 40 years through a one-cent sales tax increase.
“I think we’re at a pivotal moment for transit,” said Jason Baker, a senior vice president of Silicon Valley Leadership, a tech industry organization, which has previously campaigned for transit funding through ballot measures. “The old model focused around peak commute hours is not how we’ll be using transit and, frankly, funding transit in the future.”
(c)2021 The Cupertino Courier. Distributed by Tribune Content Agency, LLC.
