Solving SFMTA’s solvency crisis
By: Will Reisman
Examiner Staff Writer
February 8, 2010
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Vanished: The SFMTA has lost $230 million in state and local funding in the past two years, when fares increased. (Examiner file photo)
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As the San Francisco Municipal Transportation Agency grapples with a $16.9 million midyear shortfall, policy experts say new revenue measures are needed to help it become financially stable.
That deficit, which must be made up by June 30, is a sliver of the agency’s larger problems — it faces a $199 million shortfall for the upcoming two fiscal years. The SFMTA has an operating budget of $808.6 million this fiscal year.
“There is no question that Muni’s budget requires radical rethinking,” said Gabriel Metcalf, executive director of San Francisco Planning and Urban Research, a local think tank. “The current model is not sustainable.”
If the SFMTA, which operates Muni, moves forward with its current budget-balancing proposals, it will mark the third time in less than a year that a fare increase is imposed, and the second time in six months that service is radically altered.
The agency is not in rare company. Last year, 90 percent of the nation’s transit agencies raised fares or reduced service to help make up budget shortfalls, according to Virginia Miller of the American Public Transportation Association. However, several national agencies have been able to look beyond those means by coming up with revenue proposals.
For years, the Southeastern Pennsylvania Transportation Authority, which operates transit service in Philadelphia, faced staggering annual budget deficits. In 2007, the state passed Act 44, which established a transportation trust fund that provides consistent money for service. Using portions of toll funds, sales tax and lottery money, Act 44 provided the transit agency, which has an annual $1.1 billion budget, with $562 million this fiscal year.
“We’re facing a relatively minor operating deficit this fiscal year, so Act 44 is working pretty well for us at the moment,” transit agency spokesman Richard Maloney said.
In the Midwest, the Cleveland Regional Transit Authority helped balance its budget in part by getting a dedicated funding source from local planning organizations, which manage infrastructure projects in metropolitan areas, according to Budget Manager Gale Fisk.
Budget problems still remain in Philadelphia and Cleveland, but Maloney and Fisk said their respective agencies are in a better place now for imposing funding proposals.
Similar measures are being eyed by the SFMTA, which lost $230 million from state and local sources during the past two years because of the recession. State Sen. Mark Leno, D-San Francisco, is sponsoring legislation to let citizens vote on increasing the vehicle licensing fee in San Francisco, a move that could generate $40 million a year for city sources, including the SFMTA.
Metcalf, who sees great benefit in the increased vehicle licensing fee, also thinks an increase to state and federal gas taxes, with revenue streams dedicated to public transit agencies, would greatly help the SFMTA’s budget woes.
In 2007, San Francisco voters approved Proposition A, which was designed to give the SFMTA more autonomy and millions more in funding, but the state and local economic crisis has so far made the plan’s benefits moot. Metcalf thinks that another Proposition A-type reform is necessary to save the SFMTA.
Board of Supervisors President David Chiu, who has supported Leno’s vehicle licensing fee tax, said that when it comes to the SFMTA, “everything is on the table.”
Labor reforms called key to creating healthy budget
Finding new revenue sources for the San Francisco Municipal Transportation Agency is imperative, but no progress can be made unless the department undergoes major labor reforms, according to one policy expert.
Union heads representing Muni operators reached a tentative deal with The City on Friday. The agreement will be unveiled this week to members of the union, who will have to vote on the proposal before it can be approved.
This fiscal year, the SFMTA is projected to spend $492.7 million on employee salary and benefits, a figure that amounts to 61 percent of its total operating budget of $808.6 million, according to department documents.
“The first and foremost concern for Muni should be labor reform,” said Gabriel Metcalf, executive director of the think tank San Francisco Planning and Urban Research.
Metcalf specifically cited the need to allow the SFMTA to hire part-time drivers to work the morning and evening commutes and require that operators log 40 hours a week before collecting overtime pay as important cost-saving measures.
The SFMTA wants the union to make labor concessions of about $10 million annually.
—Will Reisman
