Is Public Transit Bankrupt?

March 31, 2010


With the announcement this week by Sacramento Regional Transit that it is reducing bus and train service by 22 percent, it’s never too late to address the problems faced by the chronic deficit-plagued transit systems in the state.

The American Public Transportation System (APTS) reported last year that the impact of America’s economic downturn on public transit systems is widespread because of declines in real estate transactions, property tax collections and sales tax revenue.

What these government-run transit systems fail to acknowledge is they cannot sustain ridership while cutting services and raising prices, at the same time as they continue to expand light rail train lines to sparse service areas.

Bus systems worked fairly efficiently up until the 1970’s, primarily moving people from where they lived, to places of work and shopping, according to many observers. Then when light rail trains came along, bus lines were altered to feed the trains instead of continuing to move people where they needed to go. It was a “If you build it, they will come” mindset. However, in many cities, not enough train riders ever came.

Currently, more than 80 percent of systems have seen flat or decreased funding from state sources according to the 2009 APTS report. “Among those systems facing a decrease, the average decline was more than 20 percent.  In some states these cuts are quite substantial.  For example, all transit systems in California are facing the complete elimination of state funding. Gov. Arnold Schwarzenegger recently signed the “gas tax swap” package, restoring funding to the State Transit Assistance (STA) program that was eliminated last year.  However, declines are seen in local and regional funding,” reported the APTS.

The report reveals that among those public transit systems reducing service, nearly 65 percent have eliminated or reduced off-peak service and 48 percent have reduced the coverage of public transit service.

Last July, San Francisco’s Bay Area Rapid Transportation District, raised fares by 6 percent and added a 25-cent “surcharge” for all commuter rides between San Francisco and the East Bay, a 2 percent increase to fares, more expensive parking rates and cuts to service, to cover a $25.2 million midyear deficit, according to a San Francisco Examiner story in January.

On the Frum Forum last April, Jeremy Carl wrote, “San Francisco’s inefficient, public sector monopoly rapid transit company, BART, is now running a large deficit. BART’S answer is to further cut service and raise prices (just the opposite of which any privately run entity would do.) This will have the effect of further depressing ridership and putting the system further into long term deficit.”

San Francisco’s BART rail line is expanding to the airport even with only about 60 percent of the ridership that was projected by rail experts to justify the massive and costly rail expansion. Sacramento is also proceeding with a light rail line to the airport and to a development outside of town that has not even been built.

In a December op ed I wrote for The Sacramento Bee about Regional Transit In Sacramento, research revealed while Regional Transit’s budget has exponentially increased in size since the 1970’s, the ridership has not kept up with the budget increases. This can be tied directly to Light Rail, which has been a financial drain on Regional Transit since its inception. The number of Regional Transit employees has also increased, perhaps reflecting the massive budget increases, but the ridership is not justifying the increases.

  • In 1974-75 the RT operating budget was approximately $9.6 million, bus ridership was 12.5 million with just 418 employees.
  • By 1990, the operating budget was $40.6 million with a ridership of 14 million on buses and 5.7 million on trains, and 652 employees.
  • In 2009, RT claims to have 32 million riders, 1200 employees and boasts an annual budget of $148.5 million. Sacramento’s population stands at around 2 million for the region.

RT General Manager Mike Wiley was quoted last October in The Sacramento Bee defending the continuing expansion, “Better to get these projects in place now. It will be more expensive later,”

The Texas Transportation Institute at Texas A&M issued a “mobility report” in 2009 which measured the typical travel delays, excess fuel consumption, and congestion cost for commuters in the nation’s major urban areas. The research found that all five of the most congested and traffic-plagued cities either invested in humongous mass transit experiments designed to reduce that congestion (Los Angeles, Atlanta, Miami, Dallas-Fort Worth) or else they boasted older, well-established, vast rail systems much-praised by urban planners (New York City, Chicago). The rankings in this mobility report give no indication that these projects do anything to solve the problem. Of the 15 cities with the worst delays, every one of them has invested huge sums in rail mass transit, without experiencing improvement on the highways.

As the Washington Policy Center aptly concluded, “light rail is expensive and it requires significant public assistance. On average, West Coast light rail systems need taxpayer subsidies to pay for 73 percent of operations and 100 percent of capital improvements each year.”

California cities subsidize free bus and light rail passes for welfare clients, and in Sacramento, state employees receive 75 percent discounts on bus and light rail service.

With 28 of Sacramento Regional Transit’s 91 weekday bus routes about to be eliminated, it appears that the light rail train system is being spared much needed cuts, and 200 of the 1,200 RT employees will be cut instead of the planned 300 employees to be cut.

Instead of real, meaningful cuts to costly light rail train systems, public transit agencies are cutting bus service – the only transit service that is regularly used to capacity.

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