February 16, 2009
Transit Agencies Face Financial Crunch
By SUSAN BERLIN, Senior Editor
It could be termed the transportation paradox: Public transportation agencies are providing more rides than ever—the highest number in 50 years—demand for this kind of transportation continues to increase, yet, those same agencies are being forced to cut service, raise fares, and postpone system maintenance.
Why? It doesn’t appear to make sense. If more people than ever before are choosing public transit, why would agencies limit these choices?
The current economic downturn has affected all government spending, including public transportation, and the situation is largely similar among all transit agencies, regardless of their size or service mode. The funding for public transit is not keeping up with the demand for transit by citizens all over the country.
When the philosophy of not investing in public transit is married with the nation’s economic crisis, one arrives in . . . St. Louis, whose circumstance is very dire. Metro in St. Louis is preparing to implement significant cuts in service on March 30, eliminating close to half (43.7 percent) of its MetroBus service, nearly one-third (32 percent) of MetroLink light rail, and 15 percent of paratransit.
Moreover, the first part of a two-part fare increase went into effect Jan. 1, increasing base fares by 25 cents and eliminating the MetroLink light rail free-ride zone in downtown St. Louis; the second phase will follow in 2010.
These cuts will impact the entire region,” said Metro spokesperson Dianne Williams. “There really won’t be any transit user who’s untouched.” She noted that Metro is working to create the best system possible with the funds it has available, which means “shrinking the footprint,” providing less service outside the immediate St. Louis area, rather than cutting all routes proportionately.
Looking for Help
The New York Metropolitan Transportation Authority is looking to the state legislature for help with its projected deficits for the next three years by considering the recommendations of the New York State Commission on MTA Financing to raise more than $2 billion annually through a payroll tax. “We hope that we don't have to implement these draconian service reductions and fare increases, which are way beyond the rate of inflation,” said Elliot G. Sander, executive director and chief executive officer of the MTA.
Across the country, David A. Boggs, executive director of Valley Metro RPTA in Phoenix, is facing a similar situation. “Like most major metropolitan areas, we are held captive by the challenge created with a significant decline in sales tax revenues, and are being forced to make some tough decisions,” he said, which includes a proposed fare increase – the agency’s first since 1994.
Raising Fares, Cutting Service
The Kansas City Area Transportation Authority will increase fares by 25 cents on March 1 to prepare for a $7.2 million projected shortfall for the fiscal year. “It’s unfortunate that sales tax revenues have declined so significantly,” said KCATA General Manager Mark Huffer. To save money, he said, “we have frozen all hiring, we’ve cut travel for the staff … we’re looking system-wide at underperforming routes,” he said. “We want to impact the smallest number of people, but the shortfall is so significant that service reductions are inevitable.”
Consolidation of service is the basis for the Denver Regional Transportation District’s proposal to shut down one of several routes on the Southeast Light Rail Line, a change that could save $252,000 per year.
With very few passengers using this 10-mile route, RTD General Manager Cal Marsella explained, “this change will simply have people transfer from one of the light rail routes to another, rather than having a one-seat, no-transfer ride.”
Progressive Thinking, Efforts
As the situation becomes more acute—and before legislators can implement a dramatic change of investment philosophy—some agencies have come up with targeted efforts to minimize service cuts.
For example, Metro in St. Louis, about to radically reduce service, may receive help from an unexpected source: St. Clair County, IL, part of the agency’s service area, has offered to fund the Missouri portion of the existing MetroLink light rail route to continue midday service to Illinois.
Rhode Island Gov. Donald Carcieri has found $2.2 million to cover part of a budget deficit that will forestall a possible 20 percent cut in service: he transferred the money from a state fund earmarked for cleaning oil spills.
Jawauna Greene, spokesperson for the Maryland Transit Administration in Baltimore, said that Howard County, MD, will provide funding to maintain the existing level of transit service in the county, and that West Virginia—served by MD MTA’s MARC commuter rail service—has offered to cover expenses for that line.
The statewide agency is “trying to increase operational efficiencies” as a way of economizing, she said. “We didn’t think it would be prudent to ask our riders to pay a higher fare.”
Major Concerns in California
California is one of the 10 largest economies in the world with a gross state product of more than $1.6 trillion. It also ranks as the one state where people would most like to live – apart from their own. That second fact might pale in the face of Gov. Arnold Schwarzenegger’s proposal to slash funds for the State Transit Assistance program this fiscal year, and eliminate it completely the year after, because this program has been the only ongoing state source of funding to transit agencies in California.
In Oakland, the Alameda-Contra Costa Transit District (AC Transit) is facing money shortages even though voters approved a parcel tax increase last year. Said AC Transit General Manager Rick Fernandez: “Our receipts from sales and property taxes are down, but it is the catastrophic loss of state funding that has really put hurt on us and other transit agencies in the state.”
Last November, Los Angeles County voters approved Measure R, which will invest $40 billion over a 30-year period in comprehensive public transit and traffic relief efforts through a half-cent increase in the county’s sales tax. And yet, despite passage of that initiative, the region will still have to manage shortages.
“The Metro board is loath to cut service because the voters went out on a limb for us,” said Marc Littman, deputy executive officer/public relations for Los Angeles Metro. “We are trying other economizing measures: a hiring freeze, cutting back on new contracts for services. Metro is looking to tighten its belt in many arenas. Once we see what’s happening with the state transit budget cuts and the federal stimulus package, the Metro board will deal with the operating deficit this spring,” he added.
The San Francisco Municipal Transportation Agency is addressing a projected deficit of nearly $100 million through Fiscal Year 2010 by freezing more than 400 positions, decreasing contract spending, and postponing implementation of new technologies. “We are working every day to reduce costs and manage our resources to provide as much service as possible in these difficult times,” said Nathaniel P. Ford Sr., SFMTA executive director/chief executive officer, adding that “ the state of California is virtually abandoning its commitment to funding transit operations and local tax revenues are falling sharply.”
The Riverside Transit Agency is currently examining service options to ascertain where it could reduce duplication of routes and eliminate service with low ridership. “We would be proposing these changes that ultimately improve our system’s efficiencies regardless of the economic climate, said RTA Chief Executive Officer Larry Rubio, “but the climate accentuates the need for this move.”
The elimination of STA funding may force the San Diego Metropolitan Transit System to cut its service, and the Sacramento Regional Transit District – despite record high ridership – had to implement a fare increase in January as a result of the loss of $18.3 million in state funding.
An unstable economy has an unfortunate ripple effect on all industries—from banking to housing to public transit. So while the methods of coping vary, financial worries are common to public transit providers throughout the nation. Further, nearly every economist quoted these days says that the economy will continue to worsen before it improves.
So as America moves into the spring and the weather warms, public transportation agencies will feel both the figurative and literal heat even more as gas prices inevitably rise, and demand for public transit rises, too.