HomeBudget & Tax NewsMass Transit Agencies Face Looming Fiscal Cliff

Mass Transit Agencies Face Looming Fiscal Cliff

Mass transit agencies got $69 billion in federal pandemic aid, but now face the reality of low ridership revenue.

American public transit agencies are facing a period of profound crisis.

The COVID-19 pandemic sent ridership plunging to unprecedented depths. Then the federal government stepped in quickly, with equally unprecedented levels of support to keep operations humming for essential workers.

Sixty-nine billion dollars for transit was provided between three federal COVID-19 relief laws. But more than two years later, no more help is expected from Washington, D.C.

The trouble is that the largest transit services still desperately need assistance. None of the largest cities have seen ridership return to even close to pre-pandemic levels. They are in dire need of new funds to avoid collapse, with gaps too large to be made up for with minor service cuts or fare increases.

As federal operational support dries up, three of the six largest transit agencies are facing a so-called “fiscal cliff” next summer. Other agencies will face a reckoning a few years later, if present trends continue.

“We can’t let our agencies go over the financial cliff,” says Steven Higashide, director of research for TransitCenter. “Look at the big picture. The cost of driving is punishing Americans right now. Transit offers relief, if people can take advantage of it.”

TransitCenter analyzed the numbers for the transit agencies in the regions with the most transit ridership and talked with Governing about the different challenges facing them. Overall ridership statistics come from the website TransitRecovery.com, which draws on data from the National Transit Database.

Washington, D.C.: The Washington Metropolitan Area Transit Authority (WMATA)

The nation’s capital is facing the most dramatic crisis next year. The most recent data available shows a funding gap of $519.3 million in the fiscal year 2024 budget.

For the last three years, WMATA has been receiving over $700 million in aid from the federal government. In fiscal year 2024, that falls to $151 million. Meanwhile, only 53 percent of trips had returned to the system as of this April (in comparison with the same month in 2019).

WMATA’s ill fortunes are exacerbated by hyper local challenges. Last summer, the agency enacted plans to change its fare and schedule policies to attract riders beyond 9-to-5 white collar commuters. The changes were especially notable because Metro’s train service was created as a hybrid of inner-city rapid transit and commuter rail. The system was essentially built to facilitate commuting, offering riders an alternative to the region’s notoriously hellish traffic.

As the D.C. area boomed in the 21st century, becoming one of the wealthiest places in the United States, the Metro grew more dependent on white-collar office workers — the exact demographic that went remote at the beginning of the pandemic and shows little signs of returning to prior norms.

“WMATA traditionally have a high percentage of higher-income riders, in some ways their rail system is a lot like a commuter rail network,” says Higashide. “Whereas some smaller transit agencies, or the L.A. Metro, have predominantly low-income ridership [and have recovered better].”

That demographic disadvantage was compounded by a series of disasters that have shaken WMATA to its core. A couple months after announcing its policies to expand its ridership base, a train derailed. Although no one was hurt, it revived memories of recent deadly accidents which had spurred reforms to ward off such incidents. Instead, the derailment revealed more structural flaws, causing 60 percent of Metro’s rail fleet to be pulled from service. This year brought revelations that many Metro drivers haven’t been recertified, which triggered further delays.

This series of scandals, and their effects on service, have lost WMATA much of its political goodwill. It is unclear how the agency will plug the yawning budget hole in its near future, as local political and business leaders grow fed up with its state of constant crisis.

WMATA did not reply to a request for comment.

Boston: Massachusetts Bay Transportation Authority (MBTA)

The Boston area’s MBTA is facing the second most dramatic reckoning next year. A recent projection showed a $236 million deficit in fiscal year 2024 followed by a $406 million deficit the next year, as more federal funds run out. Ridership overall is at 61 percent of pre-pandemic levels.

The MBTA faces a confluence of challenges similar to Washington’s Metro. Boston and its environs are a hub for white-collar office work, which is likely to continue operating in a hybrid model that only requires a few days a week in person. As with other transit agencies, its bus services have bounced back the most, reaching over 70 percent of pre-pandemic ridership as of May 2022.

The agency’s inner-city rail options are far more depressed. Both the Orange and Red lines heavy rail ridership rose to over 50 percent of pre-pandemic ridership before the first omicron surge. As of May, neither have even recovered to that 2021 level. The Blue Line performed better and reached over 60 percent of pre-pandemic ridership before omicron. It then recovered even more strongly until track work halved ridership late this spring.

The MBTA says that plans to address the budget shortfall are ongoing and in the short term they are looking for cost savings by renegotiating third-party contracts, competitive bidding and fuel hedges to compensate for rising diesel prices.

“While revenues are anticipated to increase, ridership is expected to remain below pre-pandemic levels,” says Lisa Battiston, press representative for the MBTA. “We expect to work and build on solutions through the fall of this year, and we will be better positioned to provide details later this year. We concur that fare increases have marginal utility.”

In contrast to many other cities, the MBTA’s commuter rail service has recovered relatively well. It is the second-best performer based on the most recent data (leaving out paratransit usage), although the Blue Line is likely to outpace it once track work ends. Its ridership is currently over 50 percent of pre-pandemic averages, higher even than before omicron.

That may be because the MBTA and its contractor partners have tweaked service on the regional rail to attract a different ridership demographic than traditional white-collar commuters. On the Fairmount line, which mostly serves communities inside the city limits, fares were reduced and frequencies increased long before the pandemic.

“They did take some steps to reimagine commuter rail to make it more relevant for lower income, urban riders,” says Higashide. “They weren’t huge steps, but they changed some schedules so that they were less peak focused and provided hourly service throughout the day.”

Los Angeles: Los Angeles County Metropolitan Transportation Authority

The City of Angels is not known for its mass transit, but the L.A. Metro has managed to secure one of the highest percentages of post-pandemic ridership of any of the major systems. As of April 2022, it has reclaimed 70 percent of 2019 ridership levels.

That’s partly because L.A. Metro has concentrated recovery efforts on its areas of strength, like bus service. This year, they fully restored bus service to pre-pandemic levels after a well-organized pressure campaign from transit advocates. The agency has also invested in bus infrastructure, like dedicated lanes and signal priority, and discounted fares for younger and lower-income riders.

But due to the operator shortage, many of these increases in service haven’t been fully actualized. Instead, Higashide says that the higher ridership rate is probably because transit use in L.A. is more heavily concentrated among lower-income people than it is in even substantially impoverished northeastern cities like Philadelphia.

“It’s much more low income than any of the other agencies on the list,” says Higashide. “That’s because in Los Angeles, transit is just so much less competitive with driving than it is even in a place like Philadelphia. L.A.’s ridership base has always been more low income than in the Bay Area or the East Coast cities.”

Originally published by Governing. Republished with permission. For more Budget & Tax News.

Jake Blumgart
Jake Blumgart
Jake Blumgart is a senior writer for Governing and covers transportation and infrastructure. He lives in Philadelphia. Follow him on Twitter at @jblumgart.

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