As pandemic aid dwindles, the nation’s biggest transit systems face a roughly $6.6 billion shortfall through Fiscal Year 2026, according to a Bloomberg tally of the top eight U.S. transportation agencies based on passenger trips. Rising labor costs and inflation are hitting as fare-box revenue stagnates after ridership collapsed. Those eight agencies serve regions that combined contribute about $6 trillion annually to the national economy.
Local officials are pressing for help. Last month, the California Transit Association asked the state for $5.15 billion over the next five fiscal years. Without more money, transit officials across the country warn, the public can expect steep ticket price increases and drastic cuts to train and bus schedules, while long-planned expansion projects are on the chopping block.
Before the pandemic, about 7.8 million people — or 5 percent of the U.S. workforce — used public transit, according to the U.S. Census Bureau. That included about one-third of workers in the San Francisco Bay area.
Here are the financial problems facing two of California’s biggest transit agencies:
Bay Area Rapid Transit District
San Francisco’s BART, which serves 6 million people in a region that’s home to Twitter, Salesforce and Uber, in 2019 saw about 66 percent of its operating budget from fares, one of the highest percentages in the nation.
Ridership has only returned to about 40 percent of pre-pandemic levels. That means that when federal funding runs out, the agency projects a deficit of $340 million in Fiscal Year 2027-2028. The city’s public transit has been hit particularly hard because of its heavy concentration of technology jobs that can easily be done from home and from the rout in the industry that’s led to tens of thousands of layoffs.
“If BART doesn’t find new funding sources and the federal emergency money runs out, cutting service and operating hours and closing some stations will be on the table,” General Manager Bob Powers said.
That fiscal strain is threatening its AA credit rating, which could make it more expensive to borrow. And that’s crucial as it ponders building a second transbay tube at a cost of about $29 billion. BART is also expanding to downtown San Jose and Santa Clara, an approximately $9 billion project.
Leaders in the region are drafting a ballot measure for 2026 that would ask voters there to fund public transportation. And lawmakers who represent the region are appealing for steady state funding at a time when Gov. Gavin Newsom is proposing slashing $2.7 billion from the transportation sector.
The San Francisco Municipal Transportation Agency, which operates buses and cable cars in the city, has seen its ridership climb to about two-thirds of pandemic-levels. Still, it’s anticipating a $130 million deficit in fiscal 2025. That gap had been covered by the federal government, but that money is expected to run out in the next two years, leaving the agency $234 million in the hole by 2028.
L.A. County Metro
The Los Angeles County Metropolitan Transportation Authority, known as L.A. Metro, last year saw ridership on its subway, bus and light rail system reach about 70 percent of 2019 levels, with a systemwide fare-box recovery estimated at 6 percent, which is the percentage of expenses that are covered by fares. Metro officials say they can lean on federal assistance through the end of the upcoming fiscal year, which begins in July. After that, Metro is anticipating a $400 million deficit in 2025 and $1 billion shortfall in 2026.
Metro says that in order to bring back and retain ridership, the system has implemented a series of discounted and free fare programs, which puts further strain on the availability of eligible funding and its take from sales taxes dedicated to transit.
And now that California is mandating the phaseout of diesel fuel — a transition that has costly implications for L.A. Metro, which has one the nation’s largest bus fleets, Metro is looking to reach its zero-emissions target by 2030. The agency is also seeking to expand its subway system ahead of the 2028 Olympics, another expensive endeavor.
©2023 Bloomberg News. Distributed by Tribune Content Agency, LLC.
