http://www.latimes.com/news/printedition/front/la-na-transit-crunch27-2009jan27,0,5385552.story?track=rss
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 on.

"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 gallon.

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 Finance.

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 said.

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 Council.

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."

[log in to unmask]

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