Regional Transportation Funding Problems Keep Getting Bigger

In a sobering revision of the 25-year Regional Transportation Plan (RTP) at yesterday’s Metropolitan Transportation Commission (MTC) meeting, MTC staff explained that the elimination of the State Transit Assistance (STA) fund and much lower than expected sales-tax revenues forced the planning body to significantly revise down its projections for operational spending and expansion projects (PDF). The MTC revised down expected revenues by $8 billion (even despite over $3 billion in expected stimulus funds) and announced that BART’s
extension to San Jose is running a cool $1.5 billion over budget.

Most operators anticipated the crunch brought on by the elimination of the STA fund and have adjusted as best as possible, with AC Transit already raising fares and the MTA discussing a fare hike, service cuts, and additional hiring freezes.   The $4.5 billion in lower sales-tax revenues (TDA
funds in transpo-speak), will make transit operations even more difficult. 

The Valley Transportation Authority (VTA) in Santa
Clara County and SamTrans in San Mateo County will see some of the worst hits proportionate to their size.  The first graph below shows the overall expected operational deficits over 25 years, assuming current conditions with no positive change in STA or TDA funding over that period:

Operating_Shortfall.jpgLight blue is shortfalls for the major operators prior to the new TDA and STA forecasts made available yesterday.  Red is the current expected shortfall, should there be no change to expected revenues.

This graph shows the trends relative to operator size and operating expense:

Op_shortfall_2.jpgLarge operators like the MTA appear better equipped to absorb the blow of decreased revenues

Although this meeting was nothing like the tumultuous affair last month, where nearly 200 bus riders protested the use of $70 million in stimulus funds for the Oakland Airport Connector, MTC spokesperson John Goodwin said he had never seen such a marked tightening of expected transportation revenue since he’d been at the commission.   "These are new numbers just since December and reflect some very difficult challenges we face," he said.

MTC staff acknowledged that the perennial operating deficits and funding problems could not be ameliorated within the scope of a 25-year plan, but needed a bold new plan in the near term.  In addition to advocating for steady funding from the state and federal levels, MTC staff called for a comprehensive new study across every transit operator’s jurisdiction to improve productivity from existing capacity before raising fares or cutting service.  Referring to the MTA’s Transit Effectiveness Project as a model, MTC staff asked its commissioners to consider authorizing such an expansive study at their meeting in April.

When asked how much such a study would cost, MTC Executive Director Steve Heminger refused to give details.  "We need to scope the study first.  I’ll give you that answer in April," he said.

Advocates seemed to support an inter-agency study to squeeze as much productivity as possible from existing operations, while eliminating redundant services, but urged caution, keeping in mind the sensitivity of transit riders. 

Carli Paine of TransForm applauded the notion that MTC would advocate for federal and state operatining funding and argued fare increases should only be a last resort.  "We need to be careful to look at raising fares for new revenue as a deterrent to riding transit," she said.  She also reminded commissioners that while the TEP is a good model on how to increase efficiency, there are still major concerns for how MTA will pay for implementing the TEP’s recommendations.

Berkeley Mayor Tom Bates was the only commissioner to give guidance to staff on how the study should be conducted, requesting they analyze dynamic car-share programs and transit-oriented-development in conjunction with transit efficiency. 

Public comments on the proposed revisions will be taken by the MTC until April 8th.  Readers can send comments via mail to 101 Eighth Street, Oakland, CA 94607, Attn: Public Information; via E-mail to; or via fax to 510.817.5848, Attn: Public Information.

For a more detailed analysis of regional funding challenges, see today’s excellent report on Transbay Blog.

  • I posted this on the Transbay Blog as well, but I feel i’s important to point his out here:

    Transit service is not redundant simply because it runs along the same route. BART and the 14-Mission are not used the same way or by the same people, and removing one doesn’t shift those rides to the other. They are complementary, they do different things along the same route and in so doing they increase overall demand for transit along that route, which increases ridership on both lines over time.

    The MTC’s focus on pruning ‘redundant’ service is barely veiled prejudice against the transit-dependent urban core (which are relative cash cows for transit agencies) and in favor of non-cost-effective service to the exurbs.

    The conspiracy theorist in me wonders if the MTC would love to see transit disappear in the rear-view mirror, like Grover Norquist starving the beast.

  • bikerider

    VTA could totally erase its deficit tomorrow by replacing the $6 BILLION BART project with conventional rail solution.

    SFMTA could totally erase its deficit tomorrow by replacing $1.5+ BILLION Central Subway project with at-grade BRT.

    First rule of thumb when you’ve dug yourself in a hole: stop digging.

  • @bikerider: How is it legal to use capital funding for operations?

    Wouldn’t it make more sense to hit up DC for transit operations subsidy as stimulus than to try to change the strings attached to capital dollars?

    Everyone here talks about TOD but never wants to pay for the T, resulting in an OD of existing transit and a death spiral.

    There are tipping points in political contests where there is no going back, and when you get to that point, you’ve got to fish or cut bait.

    Such is the case with the Central Subway and BART to San Jose. Reiterating the articles of faith taken as gospel prevalent in the enviro community that BART is bad, Central Subway is bad and BRT is good does not change the legal framework in which money is wrapped up.

    Of course, the question of WHY we end up with these expensive capital projects that are poorly planned and amount to free money for the politically connected contractors who are selected is the root of the problem (doesn’t the Bay Area Council want us to subsidize ferry rides on the bay to the tune of $60/ride?) but so many enviros can’t be bothered to look into the strings attached to politicians for systemic evidence of corruption, preferring to be agnostic on the political economics.

    When corporations rule the procurement and contracting processes, we get projects that benefit those interests first and foremost.


  • bikerider

    Projects such as Central Stubway and BART-SJ include substantial local-match, that come out of local transportation sales tax. The sales tax is not Federal and not artificially split between “capital” and “operating” pots of money (ore more appropriately termed: “contractor mafia” and “transit riders” monies).

    Also, in our screwed up system of “one dollar / one vote”, it isn’t illegal for politicians to take large campaign contributions (i.e. bribes) from groups like California Alliance for Jobs. And there are no campaign limits on TV, radio ads, etc. to get these transportation measures passed. Enjoy the ride.

  • @bikerider:

    Prop K was approved by the voters and had a detailed spending plan attached. Is there a provision in Prop K where the Supervisors and Mayor can change the funding plan to not fund specified projects and fund other projects? If so, do you think that’s going to happen? If not, which I suspect, then the budget is locked in. Do you think that you can mount a ballot measure campaign to amend Prop K to that effect? That would probably require 2/3 vote. Enjoy that ride.

    I grew up in NYC. When my grandmother was born in 1900, the first subways were being built. The cost to build the IRT in Y2K$ was $250,000,000 without seismic or worker safety. Nobody cares now how much was spent, the system just works. We need subways in San Francisco, and we need lots of them. The main problem with the Central Subway is not that it goes nowhere. When you’re starting from nothing, you’ve got nothing to lose by going nowhere. The problem is that its been “value engineered” down to premature obsolescence with short stations and an ill-conceived connection at Market and Geary to a future Geary LR/subway. Especially if proposals to extent further north and west gain currency, the engineering needs to be beefed up to handle the future load in the same way that the IRT was well thought out for sustainability.

    BART is a bastard wide gauge railroad, but its OUR bastard wide gauge railroad. Too much capital has been sunk into it and it works well enough that that battle has been lost and there is no turning back. These investments will pale over time and generations of future riders will thank us for our foresight. For all BART to the airport’s faults (SFO charging BART rent and passing onto SFO employees fares?), it still connects the region to significant infrastructure. There is life beyond first day ridership.

    You’ve lost the battles on these projects. I’d suggest turning attention towards reconfiguring the federal funding formulas and policies as the transportation bill moves forward. We seriously need to bring federal transit operations funding dollars to transit agencies nationwide. I’d bet that for $10b or less, folks in the know think its a valid eyeball figure, sad as it is, we could fund 100% subsidy to all transit operations of all operators from Amtrak to Springfield’s Senior Trolley.

    Mrs. Bouvier, Mrs. Bouvier!

    Lamenting what might have been and paying homage to articles of faith has always been a drag for me. We need to fight for a bigger pie while they’re making pies bigger rather than accept the confines of a transit funding regime that is based on a political economy that no longer exists.



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