As local leaders present budgets for the next fiscal year, public transportation funds are on the chopping block, in cities large and small. Pandemic relief funds, which have kept many systems afloat for the past few years, are set to be drawn down in many cities by the end of this fiscal year. At the same time, ridership has gone down, while inflation and rising labor costs, pensions, and other operating costs have only gone up.
It's transit doom loop season.
In Philadelphia, for example, the regional transportation authority could face a $240-million deficit after Covid relief funds run out. The Southeast Pennsylvania Transit Authority was expecting $161 million in state funds this budget cycle, but the legislature and governor sent only $51 million. Without a way to make up the immediate shortfall, SEPTA has said that it will implement service cuts and fare increases. Gov. Josh Shapiro never signed a proposed tweak in the state's sales tax allocation — a major source of transportation funding.
“SEPTA does not want to make these cuts,” SEPTA CEO Leslie Richards told a local radio station. “These cuts will mean crowded conditions on transit, more congestion on roadways and the loss of productivity throughout the region.”
The funding cuts have been on the horizon for months: back in January of this year, Pennsylvania’s congressional leaders wrote to the Department of Transportation that the situation was dire: “SEPTA’s service is essential for the entire southeastern Pennsylvania region,” they wrote
Philadelphia isn’t alone in facing what’s known as the transit “doom loop” of decreased ridership leading to more funding cuts which leads to decreased ridership and on and on and on.
Since 2020, the Federal Transit Administration has paid out $70 billion across the country to struggling agencies, allowing them to cover operating expenses and labor costs during the height of the pandemic — something that had never been done before at the federal level. By and large, the relief money was supposed to provide a stop gap as the pandemic caused ridership – and farebox funds – to nearly disappear overnight.
“The bottom opened up during Covid,” said P.S. Sriraj, the director of the Urban Transportation Center at the University of Illinois Chicago. “In the absence of support, [transit agencies] were facing extinction. This is when the federal government stepped in, here’s x amount of dollars through a certain point in time, and then you have to figure out your own affairs.”
But ridership hasn’t rebounded to pre-pandemic levels — that means bus fare and train ticket revenue hasn’t bounced back, either. On average, national transit rides are at about 74 percent of pre-pandemic levels, although that varies from region to region. In September 2023, the Department of Transportation found that only 15 urban areas of the nearly 500 that report data to the federal government had recovered entirely.
In Miami, the agency actually reported that it had reached and even exceeded pre-pandemic levels of ridership last fall — and local voters overwhelmingly supported a ballot referendum this summer to increase transit funding. That may be one reason Miami-Dade Mayor Daniella Levine Cava backed off from a proposed $16-million cut to transit in the next budget cycle.
“Clearly, transit continues to be a priority for our community,” Levina Cava told the Miami Times, after her pivot. “I’m committed to investing in the future of transit.”
Yet in other places, a balanced budget means dramatic service cuts. Louisville’s transit authority, for example, announced that some frequent weekday routes will now be reduced to weekend frequencies, with fewer scheduled buses per hour. For transit-reliant residents, that makes it harder to get to work, doctor’s appointments and other crucial services. Similar cuts in Memphis have led to worries about the impact on low income riders in the city as well.
New York's Metropolitan Transportation Authority — which provides transit service in the city and the northern and Long Island suburbs — thought it had a work-around to set up a reliable stream of funding — a congestion toll for drivers entering Manhattan that would raise $1 billion per year, but Gov. Kathy Hochul killed it at the very last minute. Now the agency is slashing its repair program due to the loss of revenue chronicled every second by Streetsblog:
“The nature of public transportation service is that it has to preserve equity, they’re a public good,” Sriraj said. “We can’t have it both ways — we aren’t supporting agencies, and they’re not in a position to be entrepreneurial and play the market. The truth is, it will take a collective effort to address this complex issue.”
Funding cuts — whether due to revenue losses from fares, sales taxes, or aid money — all lead to worse service. And the perception that buses are always late, or that empty trains are unsafe, can also feed into a reluctance to pay and ride for the service at all. Or reduce ridership by people who do pay the fare.
Securing a reliable stream of income for public transit is difficult, but there are opportunities to expand revenue streams, Sriraj said. For example, some localities collect a real-estate or payroll tax on top of sales taxes to fund the public service. In Chicago, the Regional Transportation Authority is currently required by state law to collect half of its revenue from fareboxes, but the agency has outlined the potential for new funding streams from fuel taxes, toll roads, and congestion pricing on highways in and out of the city.
Greater state or federal support will simply be necessary if transit systems will survive the loss of commuters who now work from home in an age of rising costs and the need to keep systems in a state of good repair. Twenty-eight million Americans rely on public transit as their only option to move around cities and towns. Without a system that functions reliably and frequently, routine errands become hour-long trips, or a missed shift at work results in an unplanned pay cut. The American Public Transportation Association also estimates that for every dollar invested in transit, communities see a $5 return; people are less likely to be in car accidents, and greenhouse gas emissions dramatically decrease with every rider who gives up a car.
“[Public transit] is a valuable asset and commodity,” Sriraj said. “My fear is that people will forget that, based on recent happenings, and cast aspersions on the value.”
Correction: An earlier version of this story suggested that Gov. Josh Shapiro refused to sign a sales tax increase. In reality, no sales tax increase was on the table, but merely a switch in the percentage of the existing sales tax that goes to transit.
