Austin following Bay Area Transit Agencies on Unstainable ‘Road to Ruin’

COST Copmments: The stories below are two of many recent ones covering the rapidly deteriorating financial condition of many transit agencies throughout the country. Transit’s modern history of inefficient operations and declining ridership coupled with the more recent recession produced decline in tax revenues have created broad based transit financial crises unparalleled in modern times. The predicament is exacerbated by many cities implementing new train transit systems which are the least cost effective mode of public transportation, requiring huge taxpayer subsidies. In addition, many of the older, pre automobile cities have aging train transit systems which need many billions of dollars for replacements and upgrades.

In several major cities, including Austin, the head of the transit agency has “resigned” as the agency’s financial and operations problems have mounted.

Costs put transit agencies on ‘road to ruin’

Phillip Matier, Andrew Ross
Monday, May 3, 2010

From Sonoma to San Jose, the Bay Area’s 28 mass transit systems are bleeding money and riders at a rate that will require a projected bailout of about $1 billion a year for the next 25 years, according to a new report by the Metropolitan Transportation Commission.

Ballooning costs, coupled with a shrinking ridership and vanishing tax revenue, have led to a vicious circle of fare hikes and service cuts that chase away even more patrons – and lead to more deficits.

“It is a road to ruin,” said the transportation commission’s executive director, Steve Heminger.

Although transit agencies like to blame the recession, loss of sales-tax subsidies and state cuts for their problems, the report says many of their wounds were self-inflicted.

For example, from 1997 to 2008, the total cost of running the Bay Area’s bus, train and ferry systems climbed 52 percent over inflation.

During the same period, however, the number of commuter lines and hours of service increased just 16 percent. Ridership rose a mere 7 percent.

The biggest chunk of the cost increases, according to the report, consists of raises and benefits for management and the rank and file, many of whom are now among the best-paid transit workers in the country. In fact, the cost increases were so dramatic, it’s questionable whether the systems could have covered their costs even if the economy had held.

“It’s expensive to live in the Bay Area, and we have an aging system,” said Scott Haggerty, an Alameda County supervisor and chairman of the transportation commission, which hands out money to the various agencies.

But “there is no question,” Haggerty said, that “we have to start looking at cutting back on duplicate services and running more efficiently.”

They’d better, because unless the systems change dramatically, they’re going to need $25 billion over the next 25 years, the report says.

Where’s that money going to come from? No one knows for sure.

But if history is any indication, it’s going to come from all of us through higher fares, higher tolls, higher taxes – or, if you’re in San Francisco, from more parking meters and even higher ticket fines.

Operational costs are outstripping revenues in ‘unsustainable’ Bay Area transit system

By Janis Mara/ MediaNews Group
Posted: 05/04/2010 01:48:39 AM PDT

Some of the 300 passengers exit the Baylink ferry in Vallejo, during a recent closure of the Bay Bridge that forced commuters to find other means of transportation. According to the Metropolitan Transportation CommissionÕs 2009 annual report, Bay Area ferries, buses and trains are barreling toward huge deficits. (Chris Riley/Times- Herald)

Bay Area public transit is caught in a downward spiral, and fundamental changes must be made to rescue it, according to the region’s major transportation planning agency’s annual report.

The area’s more than two dozen transit systems, including BART and AC Transit, are likely to need about $1 billion a year for the next 25 years to survive, according to the Metropolitan Transportation Commission’s 2009 annual report. Bay Area ferries, buses and trains are barreling toward deficits totaling about $25 billion deficit in 2033.

“By all measures, the long-term prognosis points to decline, not stability,” Steve Heminger, the commission’s executive director, said in the report. “The current transit system is unsustainable. ”

Fewer people are taking transit to work because fewer people have jobs and reduced spending means less revenue from sales tax. In response, agencies cut service and hike fares, further decreasing income from the fare box. Heminger described this cycle as “a road to ruin.”

Other problems included operating costs. Since 1997, the total cost of running the Bay Area’s transit agencies increased 52 percent, after factoring out inflation.

Many of these cost increases come from raises and benefits for transit employees, according to the report. As just one example, BART employees are among the country’s highest paid transit workers.

“If allowed to continue, these trends would eventually threaten the very viability of the Bay Area’s transit system,” the report said.

The annual report cited figures from the commission’s long-range regional transportation plan, Transportation 2035: Change in Motion, which predicted the enormous shortfalls.

In response to the crisis, the commission has formed a task force to come up with potential solutions, the Transit Sustainability Project. The task force’s first meeting is May 14 in downtown Oakland at the transportation commission’s headquarters.

The report hinted at steps that might be taken to fix the problems. One step might be cutting back service at times with low ridership, such as evenings, and to outlying areas, since “service design” was identified as a key component of sustainable transit.

“Transit operators struggle to satisfy the public’s expectation of comprehensive, fixed-route service to even far-flung locations — whether or not ridership levels make such service truly feasible,” the report said.

Cost containment was identified as a second key component of sustainable transit. Reining in costs such as employee salaries might come under this category.

The final component was “institutional arrangements. ”

Bay Area transit has long been criticized as Balkanized, with more than two dozen agencies protecting their own turf. Consolidation and cooperation might come under this category.

“We have multiple layers of decision-making and service delivery — 28 separate transit agencies, each with its own board, staff and operating team, that confound efforts to deliver a regional system passengers can understand,” the report said.

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