California Mass Transit Hopes for Bailout in Already Tight Budget - WSJ
California Mass Transit Hopes for Bailout in Already Tight Budget - WSJ
Anemic ridership and ebbing Covid-era emergency funding is expected to hurt hard-pressed transit systems like BART
Public transit agencies across California are asking the state for a bailout, saying they face a looming fiscal crisis due to lagging ridership that could otherwise force them to cut service, lay off employees or shut down some lines and stations.
Since the start of the pandemic, some $69 billion in federal emergency funding has kept buses, trains and subways across the country running. But most of California’s transit agencies say they expect that funding to run out within two years. Meanwhile, ridership numbers remain well below prepandemic levels as many high-income workers continue to work from home at least some of the time.
Now the agencies, including Bay Area Rapid Transit, are asking state lawmakers for temporary bridge funding to keep them afloat as they scramble to secure new revenue streams.
The requests, however, come as California faces an estimated $22.5 billion budget deficit and Gov. Gavin Newsom has separately proposed roughly $2 billion in cuts to transportation infrastructure projects.
It also comes as big city leaders like San Francisco Mayor London Breed seek to revitalize financial districts and downtown corridors that have been hollowed out by the persistence of work-from-home practices.
Bay Area Rapid Transit, or BART, which has traditionally served as the regional commuter rail for workers heading into downtown San Francisco, could be hit particularly hard by the funding gap. While most public transit systems in California receive a relatively small share of their operations budget through state funding from a diesel sales tax, BART was more reliant on passenger fares than most.
In 2019, fares paid by an estimated 118 million BART riders covered about two-thirds of the system’s operating expenses for the fiscal year ending in June 2019. During the 2021 fiscal year, that figure had plummeted to a 12% share.
“It was the gold standard and it’s now our Achilles’ heel,” said Alicia Trost, a BART spokeswoman. “The pandemic has changed things and we have to evolve with it, and that includes our funding model.”
Ridership systemwide is still hovering at about 40% of prepandemic levels and is recovering more slowly than officials had projected. Ms. Trost said the agency now expects to run out of federal funding by January 2025.
BART and other agencies across the state have launched a coordinated campaign to pressure lawmakers to provide at least some funding with the tagline, “We can’t afford to lose transit.”
BART’s ridership rebound has closely mirrored office occupancy rates for downtown San Francisco. A study by University of Toronto researchers using mobile device activity showed that as of November, downtown San Francisco ranked last in economic recovery among 62 major cities in the U.S. and Canada.
A recent spate of high-profile tech industry layoffs as well as increased attention on visible homelessness and crime in the business district haven’t helped matters.
In a statement, a spokeswoman for Ms. Breed said transportation, including the agency that runs San Francisco’s streetcars and buses, plays a vital role in the mayor’s vision for downtown recovery.
The Metropolitan Transportation Commission, which coordinates transportation funding for the Bay Area’s nine-county region, said BART and other transit agencies within its jurisdiction face cumulative deficits of $2.5 billion to $2.9 billion over the next five years. Without additional aid, the commission said in a recent presentation, best-case scenarios could involve delaying transitions to zero-emission buses, canceling safety projects and deferring repairs to elevators and other infrastructure disabled riders rely on.
BART officials say at its worst, the fiscal crisis could prompt them to run trains only once an hour, shut down service after 9 p.m. or eliminate weekend service altogether. Transit advocates warn such draconian moves would quickly put agencies like BART in a “death spiral” as fewer users find the service useful and ridership further declines.
A reduced mass transit system could result in “profound ramifications for our state’s economy, for our climate goals, for congestion on our roads,” said state senator Scott Wiener, a legislator from San Francisco who is leading the charge to appeal to his colleagues for fiscal relief for the beleaguered transit agencies.
Sen. Nancy Skinner, who chairs the state Senate Budget Committee, couldn’t be reached for comment. Assemblyman Phil Ting, who chairs the assembly budget committee, declined to comment on the funding request.
H.D. Palmer, a spokesman for the state Department of Finance, said state legislators will need to consider whether they are willing to propose spending cuts in other areas to accommodate requests such as the one transit operators are making.
Recent state revenue collection data, as well as an analysis from the nonpartisan Legislative Analyst Office, suggest the $22.5 billion deficit could grow by the time the governor puts forth a revised budget proposal in May.
While regional transportation officials could place a revenue measure before voters in 2024, they are instead moving forward with an effort to pass a bond measure to finance affordable housing, something that was in the works before the pandemic. The Metropolitan Transportation Commission says it hopes to put a transportation measure before voters in 2026.
Mr. Wiener, who uses transit daily when he is back in his San Francisco district, said many agencies are aware they need to address concerns about safety and cleanliness and improve service on weekends and after hours to appeal to leisure riders.
BART, for example, has already begun experimenting with ways to move away from its commuter-focused business model, highlighting transit-accessible festivals and sporting events and launching a viral campaign selling BART-branded holiday sweaters.
But unless transit agencies can plug the billions of dollars in anticipated shortfalls, Mr. Wiener said, they won’t be in a position to fix the problem.
He realizes he and other transit advocates are facing an uphill battle in asking the legislature and governor for new, albeit temporary, funding in the midst of a state budget shortfall.
“We’ve always struggled with transit funding in the legislature,” he said. “I’m optimistic that we’ll be able to do something, the question is how much and will it be enough?”
Write to Christine Mai-Duc at christine.maiduc@wsj.com
Corrections & Amplifications
Transit
agencies in California get state funding for operations from a diesel
sales tax. An earlier version of this article incorrectly said the
funding comes from a diesel excise tax. (Corrected on Feb. 24)
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