Siphoned funds drain transit
January 2, 2010
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Cash-strapped transit agencies across the Bay Area are bracing for a financial blow this month that could ax state funds, adding to the already dour budget situations.
The region’s two biggest providers — Muni and BART — first reported projected shortfalls of $47 million and $26 million, respectively, just three months into the fiscal year, which runs from July to June. Those projections come despite the agencies raising fares, reducing service and laying off workers to reconcile huge deficits heading into this fiscal year.
Gov. Arnold Schwarzenegger is expected to announce that he will seek to raid roughly $1 billion in transit funding.
With California facing a $21 billion projected deficit, Schwarzenegger is proposing a complex gas-tax swap that would allow the state to avoid a voter-approved initiative to direct 20 percent of its gas-tax funding into transit and transportation projects. If the proposal is approved and more than $1 billion would be diverted toward state coffers, the already-struggling transit agencies could spiral into additional debt.
Along with BART and Muni, which are the largest transit providers in the region, the cuts are affecting other agencies. AC Transit, which runs primarily in the East Bay, recently cut service to help make up a $57 million shortfall, and the Valley Transportation Authority, operating out of Santa Clara County, will do the same next month to help offset a two-year, $70 million projected deficit.
Muni and BART officials said they will make up the current shortfalls by diverting federal stimulus funds, eliminating positions — many of which in the case of BART are vacant — and belt-tightening on employee salaries.
The trimming of budget costs comes on the heels of BART and Muni altering services to balance their budgets heading into this fiscal year. The new service for Muni, which did eliminate a handful of bus routes, went into effect in early December.
The return of a healthy economy will bolster the agencies, but there is need for systemic reform to prevent transit operations from continually running in the red, said John Goodwin of the Metropolitan Transportation Commission, which is in the midst of a two-year study on transit sustainability in the Bay Area.
“We currently have a transit network that we can’t afford now, much less the ability to meet the needs of a growing and increasingly transit-dependent population,” Goodwin said. “There has to be a different approach to running these operations than the one that is prevalent now.”
Virginia Miller, spokeswoman for the American Public Transportation Association, a transit advocacy organization, said there are hopes that Congress might identify new funding possibilities in its next transportation package, which is expected to be authorized sometime next year. One idea being floated is hiking the federal gas tax, which hasn’t been raised since 1993, Miller said.
“Public transportation exists for the public good — it’s never been a for-profit enterprise,” Miller said. “We need as much funding we can get from the state, local and federal level to operate.”
Cuts from state resources deal major blows to transit budgets
A major contributor to the budget problems for Bay Area transit agencies has been the recent suspension of State Transit Assistance funds.
In 2007, California doled out $316 million in STA funds for transit agencies, but with the state dipping further and further into an intractable budget deficit, that revenue pot has been slashed drastically.
Last year, the STA total was cut to $153 million. This fiscal year, there will be no funds allocated at all, according to statistics from the MTC, a regional planning and financing body. In the last three years, the Municipal Transportation Agency, which oversees Muni operations, has lost $179 million in STA
funding.
“The elimination of state funding for transit operations has been a real blow in recent years, and not getting that funding going forward would be equally damaging,” Muni spokesman Judson True said.
Another hit has been unexpectedly low sales tax revenue, which is an important funding source for several transit agencies. Sales tax makes up about one-third of BART’s operating budget, but revenues have been down 20 percent this year, costing the agency dearly.
— Will Reisman
