From the Los Angeles Times

A mass transit dilemma: Ridership up, funds down

Public transport systems are reeling from an economic crisis that has 
dried up tax revenue and blown gaps in state budgets. They are having 
to raise fares and cut services.

By Richard Fausset

January 27, 2009

Reporting from Miami - Demetrius McClain's late-morning commuter 
train sped smoothly past strip malls and palm trees, heading north to 
his job in Ft. Lauderdale, about 30 miles away.

McClain, a Web designer, started riding the train in May. The choice 
between the train and his car was a no-brainer: Gas prices were more 
than $3.60 a gallon and climbing. His commute on the Tri-Rail -- 
which connects Miami to Ft. Lauderdale and points north -- cost him 
$4 per day. Even with lower gas prices, the train still saves him 
money and the aggravation of fighting traffic on clogged I-95.

But today, the Tri-Rail, like transit systems across the country, is 
reeling from an economic crisis that has dried up local sales- and 
property-tax revenue and blown open huge gaps in state budgets.

The regional transit authority that operates the South Florida trains 
said it expects to lose $18 million in state and local funding in 
October. That could mean cutting back from 50 trains per day to 20, 
with most cuts coming on the non-rush-hour schedule McClain depends 

"If it happens, I'm going to be forced to drive," he said. "I'm not 
very happy about that -- but it's an adjustment I'll have to make."

The dramatic spike in gas prices that began in 2005 sent Americans 
flocking to trains, buses and subways, a trend that appears to have 
held up even as gas prices have dipped. But 2009 could be a year of 
crisis for the agencies that run them -- a time of more riders but 
much less money.

Some new funding could come as part of House Democrats' proposed 
$825-billion stimulus package, which, in its current form, sets aside 
$9 billion for public transportation. But all of that money would be 
used for new capital projects, not operating costs. And it is 
operating budgets -- the money agencies need to run the systems they 
have now -- that are getting hammered.

If service cuts or increased fares become widespread, transit 
operators around the country fear they will drive away the new 
converts they picked up when gas prices were high.

"What's happening in Miami is happening all over the country," said 
Joe Calabrese, chief executive of the Greater Cleveland Regional 
Transit Authority. "For the layperson, it's very difficult to 
understand that if ridership is at all-time high levels, how can we 
be cutting service?"

According to the American Public Transportation Assn., the third 
quarter of 2008 saw the largest increase in ridership in a 
quarter-century. Though national ridership numbers are not available 
for the final quarter of last year -- when gas prices sank most 
dramatically -- some agencies, like the South Florida Regional 
Transportation Authority, which operates the Tri-Rail, continue to 
report steady or increased ridership.

In Cleveland, ridership increased for the sixth consecutive year in 
2008. But like every major public transit system in the country, 
Cleveland's relies on both fares and tax revenue for funding -- and 
county sales taxes, a key component of the budget, have plummeted in 
the stalled economy, Calabrese said.

In the last 13 months, Cleveland riders have seen their fares raised 
twice and services cut by 8%. Calabrese said another fare increase 
and 6% service cut may be necessary this year.

The shrinking tax revenues are particularly painful to transit 
systems that continue to be hammered by high fuel costs: Many of 
them, Calabrese said, are still locked in to high-price fuel 
contracts that they thought were good bargains when gas was $4 per 

Similar stories are cropping up around the nation. In Washington, 
D.C., the Metro transit system, facing a 13% budget shortfall, is 
considering cutting 900 jobs and enacting the largest service cuts in 
its 33-year history. Atlanta's MARTA system faces a $57-million 
deficit. Officials there are considering cutting weekend trains and 
closing recently renovated train-station bathrooms.

The situation is particularly dire in California, where Gov. Arnold 
Schwarzenegger, facing a $41-billion state budget shortfall, has 
proposed eliminating grants to local transit agencies for the current 
fiscal year and the next -- a move that would save $559 million, 
according to H.D. Palmer, spokesman for the state Department of 

In San Francisco, that possibility has transit officials considering 
cuts to the popular Bay Area Rapid Transit trains -- even though they 
were ripping out seats last year to cram in record numbers of riders.

In Los Angeles, the transit system has avoided major service cuts, 
said Marc Littman, a Metropolitan Transportation Authority spokesman. 
But the elimination of the state subsidy -- which provides nearly 16% 
of the MTA operating budget -- along with shrinking sales-tax 
revenue, means tough choices lay ahead.

At their meeting Thursday, MTA board members discussed cutting 
160,000 hours of bus service this year or next from the current 7.5 
million hours a year. The decision was delayed for at least a month 
as several board members, including Los Angeles Mayor Antonio 
Villaraigosa, indicated they were in no mood to cut so soon after 
voters approved Measure R, the half-cent sales tax intended to fund a 
number of public transportation projects.

Those projects, which include the so-called Subway to the Sea, would 
require a mix of local, state and federal funding to be realized. 
With limited state and federal funding, those projects could be 
postponed, Littman said.

Fare increases cannot be used to make up the difference -- at least 
for a while. The L.A. ballot measure banned hikes in regular fares 
until 2010, and forbids increases for seniors, students and the 
disabled until 2013.

"We're in the situation where the public gave us their vote of 
confidence, saying, 'Hey, we want to see more service out there, not 
less -- and we want to keep the fares low, ' " Littman said.

The federal stimulus package, as currently proposed, could provide 
money for sleeker trains and buses, and for expanded service. But 
many agencies don't have the money to run the systems they have.

The American Public Transportation Assn., which lobbies on behalf of 
local transit agencies in Washington, is hoping Congress will add 
$2.5 billion for operating expenses to the stimulus bill, which could 
go to the House floor as early as next week.

"Today, transit systems of all sizes are cutting service and planning 
immediate employee layoffs," wrote William W. Millar, the APTA 
president, in a letter to House Speaker Nancy Pelosi on Jan. 16. 
"Public transportation services should not be cut when the United 
States is attempting to reduce its levels of energy consumption."

In addition to general skepticism about the stimulus strategy, the 
idea of using that money to fund transit operating costs may be a 
particularly hard sell politically.

Ronald D. Utt, a research fellow at the conservative Heritage 
Foundation, said such spending was essentially a way to avoid 
subsidizing fares for transit riders. "That's really not consistent 
with the purpose of the stimulus plan, which is to create jobs," he 

Proponents argue that operating subsidies would help the economy by 
preempting transit layoffs. But some concede that it would only 
temporarily address the core problem -- which is the decline in local 
tax collections.

"You're only postponing the day of reckoning in terms of generating 
more revenue for these programs," said Deron Lovaas, federal 
transportation policy director for the National Resources Defense 

The crisis looming for Florida's Tri-Rail system stems from the 
devastated real estate market in counties it serves: Miami-Dade, 
Broward and Palm Beach. Officials in Palm Beach County, in 
particular, have said they may have to cut about $3 million in 
funding to the train system for the fiscal year that begins Oct. 1.

For the transit authority, the total loss is multiplied because the 
three counties have an agreement to fund the system at the same level 
each year. The state would also pull its matching $9-million 
contribution. The agency has been trying for years to convince state 
lawmakers to fund the train with a $2 tax on rental cars, so far with 
no success.

Jack L. Stephens, the transit authority's deputy executive director, 
noted that the agency completed $450 million in improvements less 
than two years ago, which allowed the system to expand from 28 to 50 
trains per day. "Now we potentially don't have the money to fulfill 
the promise of that investment," he said. "It's crazy."

For some, the cuts will be an inconvenience, but for others the 
consequences will be more serious. Lisandra Fonseca, 21, of Miami 
relies on off-peak and weekend trains to get her to her job at a 
McDonald's 30 miles north of home.

If the trains are mothballed, she said, "I'd just lose my job."

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Times staff writer Steve Hymon in Los Angeles contributed to this report.