Eighth of a Series: More Hard Times for Bay Area Transit?

Much has been written about the alleged downfall of San Francisco and the Bay Area in general. When I visited in June to catch up on rail transit extensions in California that had started service during the five years since I last visited there, I did not find evidence of a city in its death throes, as some media claimed. To the contrary, the city and the area were busy with tourists visiting, locals going about their lives, and local business operating. Transit was doing relatively well, too. For the most part, local trains and rail transit had recovered from the cuts that occurred during the COVID-19 pandemic, keeping the city and the region moving almost as much as it had before the virus struck.

The transit picture was very different four years ago. As the virus took its toll, reporters from Railway Age and its sibling publications chronicled the decline of the entire railroad industry, including rail transit. I continued to report on transit’s recovery, such as it was, for the next three years. The Bay Area was hit hard during that time, perhaps harder than any other major metropolitan area. BART (Bay Area Rapid Transit, which serves San Francisco and the East Bay) made severe cuts, both in terms of frequency and span of service. Caltrain, which connects San Francisco and San José and adds a few commuter trains continuing south to Gilroy, lost most of its riders for a while, but kept operating. The counties in its service area voted to increase their sales taxes to keep Caltrain going. The San Francisco Municipal Transportation Agency (Muni) was among the hardest hit anywhere in the nation. Three of the city’s six light rail lines were converted to bus operation. Operation of the unique cable cars was suspended, and the historic streetcars that run on Market Street and the Embarcadero met the same fate.

Even on the bus side, Muni went from operating 89 bus routes before the virus struck to 17 at the lowest point. The temporary standard was that everybody would have a bus stop within one mile of their home. At this writing, the system has recovered to 53 routes. There were also cuts in terms of frequency and span of service (length of the service day). There were also cuts on two peripheral operations in the area: the Santa Clara Valley Transportation Authority (VTA), which runs light rail and local buses in and around San José, as well as Sonoma-Marin Area Rail Transit (SMART), which runs trains in the North Bay. As we reported in July, rail transit in the region has mostly recovered to pre-COVID levels, except that Muni’s historic streetcar route on the Embarcadero and the L-Taraval light rail line are currently out of service, the latter for renovations and temporarily replaced by buses.

One Crisis to Another

As we have been reporting, the federal COVID relief grants that transit providers can use to support operations are limited, and the money is running out almost everywhere. The Bay Area is no exception.

Locals have been aware of the problem for more than a year. José Martinez reported for the local CBS outlet on May 25, 2023: “Drastic service cuts may be coming to Bay Area mass transit as agencies see the end of COVID relief funds while ridership levels have not yet recovered. In the next fiscal year, BART is projected to have an operating deficit of $143 million, San Francisco Muni will have a $130 million deficit, and Caltrain’s deficit will reach $49 million … BART and San Francisco Muni may face service cuts this summer if they do not receive a $5 billion bailout included in the state budget. The agencies and other Bay Area transit systems are running out of federal pandemic aid and seeking a statewide subsidy to avoid layoffs and service reductions.” His report also said that Gov. Gavin Newsom cautioned that the state’s $31 billion budget deficit “limits its financial capacity to provide substantial assistance” for transit.

Muni sounded the alarm, too. The day after Martinez’s report, Jeffrey Tumlin, the agency’s Director of Transportation, issued a statement : “Without state funding, we will have no choice but to scale back Muni to pandemic levels of service when we had 40% fewer Muni routes, service ended at 10 p.m. and the hilly neighborhoods of San Francisco were barely served.” Tumlin cautioned that, if transit service is cut, more people will use their automobiles, which will harm the environment. He also warned: “It is imperative that the state legislature extend a lifeline to Muni and other transit agencies across the state that face similarly massive financial shortfalls. The people of San Francisco, and California, are depending on it.”

That crisis passed, as Roger Rudick reported in SF Streetsblog on June 12, although the deal had not yet been finalized at that time. He reported: “Thanks to the efforts of thousands of advocates and hard-working politicians and staff, a last-minute deal was hammered out in Sacramento over the weekend to provide emergency state funding for the Bay Area’s transit agencies.” Rudick quoted a statement from San Francisco’s Sen. Scott Wiener, who said: “The Legislature’s budget agreement is a very positive first step toward securing the future of public transportation in California. Though significant work remains to avoid our transit systems’ fiscal cliff—which was created by the end of federal pandemic emergency aid before transit ridership fully recovered—this budget agreement solves a significant portion of transit systems’ collective operating deficit. It does so by allocating $1.1 billion in largely cap-and-trade funds over three years to public transportation operations—allowing those funds to be flexible and thus eligible for transit operations. This is a very meaningful step in tackling the fiscal cliff, and we estimate that, over the next three years, this flexible funding eliminates as much as half of the Bay Area’s transit fiscal cliff.” Cap-and-trade funds come from business paying for the privilege of releasing carbon emissions into the atmosphere. Wiener also said that the deal reversed Newsom’s planned cuts of $2 billion in capital funding. According to Rudick, Newsom proposed to restore the capital funds and allow transit providers to use them for operations, but that would be an either/or situation. Wiener had warned that using the money for operations instead of capital projects could jeopardize federal infrastructure grants for those projects.

That positive news might have resulted, at least in part, from citizen action. SF Streetsblog reported a demonstration at San Francisco’s Civic Center that included a mock “funeral” for transit, a warning of dire consequences if the local agencies are not funded sufficiently.

On Nov. 27, Kevin Truong reported in the San Francisco Standard that help could be coming: “A financial life raft to keep the Bay Area’s struggling transit agencies temporarily afloat is on its way. But it comes with a catch: BART and Muni will have to do more to deal with fare evasion and public safety to get the money.” The photo accompanying his report showed a man jumping a turnstile. Truong’s report continued: “The Metropolitan Transit Commission is allocating around $747 million in state and regional funds over the next two fiscal years to help local transit agencies facing drastic declines in ridership and revenue. Bay Area transit ridership has recovered to around 66% of pre-Covid levels, according to commission data. The vast majority of the money—around 85%—will go to BART and Muni, which will get $308 million and $352 million, respectively. Other agencies receiving significant dollars include Golden Gate Transit with $41 million, Caltrain with $25.4 million and AC Transit with $32.6 million.” AC Transit runs buses in the East Bay, and Golden Gate operates in the North Bay.

According to Truong, about $300 million in funds from the Metropolitan Transit Commission will augment $447 million from the State. Still, as he reported: “Without the additional funds, Muni and BART estimate a funding shortfall of $867 million and $1.05 billion, respectively, over the next five years. The Bay Area-wide cumulative deficit across operators over the same period is projected to add up to nearly $2.7 billion.” He also reported that agencies must cooperate to crack down on fare evasion and improve schedules for better connectivity, along with improved safety procedures, mapping and wayfinding for riders.

The Problem Persists

On March 28, 2024, SF Streetsblog reported a “Talking Headways” podcast on the subject of “Saving Transit from the Fiscal Cliff” sponsored by advocates from SPUR, San Francisco Planning and Urban Research. Laura Tolkoff, Transportation Policy Director at SPUR, started the 48-minute discussion by saying, “The governor has released his budget message, and the legislature has also issued their priorities and we really were not seeing a lot of traction for this cause. And I think to put it mildly, we were starting to get really worried. This is where we really started leaning into direct action and organizing and using the media and public opinion to bring attention to this cause.”

Advocates are coming up with ideas to fill in the fiscal hole. Ricardo Cano reported in The San Francisco Chronicle on July 6, 2024: “San Francisco transit activist Chris Arvin has had a front-row seat to the potential slow-motion collapse of Muni, from its struggles to restore pre-pandemic service to the nine-figure looming ‘fiscal cliff’ that could destabilize the city’s flagship transit system.”According to Cano, Arvin suggested taxing ride-hailing services to help pay for transit. These companies, including Uber, Lyft and Waymo, provide taxi-like service at taxi-like fares, using automated or manually operated vehicles. The proposed levy would only affect profits those companies earn from operating in San Francisco. Cano reported: “On Friday [July 5], a group of about 40 volunteers delivered more than 17,000 signatures inside boxes decorated as Muni buses to the Department of Elections at City Hall. With a healthy cushion above the 10,000 required signatures, the measure is likely to make city voters’ November ballots.” He also reported: “The ComMUNIty Transit Act, as it’s dubbed, would generate $20 million to $30 million annually and indefinitely for the San Francisco Municipal Transportation Agency, which operates Muni, according to the measure’s campaign. The initiative needs a simple majority to pass. However, it would also need to garner more votes than the Local Small Business Tax Cut Ordinance that’s also on the ballot, if that measure passes as well.” Cano’s report also said that Muni service has recovered to 92% of 2019 levels.

Still, the proposed tax on taxi-like operations would not go far toward reducing the expected shortfall. Cano reported: “The SFMTA [which includes Muni] faces a $214 million budget deficit beginning in fiscal 2026, which starts July 2025. That’s when the agency will encounter its fiscal cliff and the start of annual nine-figure operating shortfalls without any more planned federal or state funding to cover the balance.” The campaign said the tax would add about 45¢ to the price of a ride that now costs $10.00.

Looking Toward the Future

As in other places like New Jersey, transit agencies in the Bay Area and its riders appear to have gotten a reprieve, rather than a long-term solution to those providers’ financial woes. In San Francisco, “Barring a dramatic ridership comeback, the money only serves to stave off until 2026 a forthcoming fiscal cliff and massive service cuts,” according to Rudick’s report in SF Streetsblog: “For a longer-term solution, the commission is aiming to put the issue in front of voters in the form of a regional transit bond measure planned for 2026. Getting there first requires an extended process involving passing state legislation authorizing the agency to pose a regional ballot measure.” So, procedurally, it won’t be easy to find a long-term solution. Cano reported for the Chronicle: “Bay Area lawmakers halted a plan in the California Legislature to allow the nine-county region to place a 30-year tax measure on the November 2026 ballot that sought to subsidize Muni, BART and regional transit service. The proposal fizzled due to opposition from some local officials and transit agencies over its potential impact on operators not facing fiscal cliffs. The plan’s demise created more uncertainty for Muni and BART.”

It also won’t be easy for structural reasons. Transit in San Francisco and the rest of the Bay Area is highly diverse in terms of modes, with many different operators. Many large “transit cities” and their surrounding areas have a single provider, or two providers, who supply all, or almost all, of the local transit. Muni and BART are the major players in the area, but there are also Caltrain, SMART, VTA, ferry operators, and several bus-only systems. They each have their own constituencies, their own budgets, and their own problems.

We have concentrated on Muni and BART in this report, because they are the biggest players. Also, the other providers in the area could not survive well if the cuts at Muni and BART become sufficiently severe in the wake of growing budget shortfalls. Caltrain keeps going because the three counties in its service area raised their sales taxes to pay for it. This is not easy in California, because a 2/3 vote is required for any tax increase.

The Bay Area also faces a specific local problem. As the location of Silicon Valley, the area is also home to many workers in the Tech sector, who now work exclusively from home, or make a trip to the office only occasionally. This is happening in other places like New York, but to a lesser extent. There simply aren’t as many peak-hour commuters on transit as there used to be, which means less revenue. Still, San Francisco is limited in size and cannot accommodate a large number of motorists who would bring their vehicles into the city and store them there. The same is true for some locations in he East Bay, such as Berkeley (home of the University of California) and Oakland, which are served by BART.

As in other places about which we have reported, a temporary solution is keeping local transit going at a reasonable level of service, but the big storm is still visible off in the distance. Politics always rules in a situation like this. While Democrats dominate in the state, transit exists mostly in large urban areas, like San Francisco and the Bay Area, and Los Angeles and its metropolitan area. There are also major systems that include rail in San José (which is now also served by BART), San Diego, and Sacramento. Will legislators from those areas be able to convince those from less-populated places, both Democrats and Republicans, to support transit? Time will tell.

Some Bay Area transit providers have also embarked on major capital programs. Muni recently opened its new Central Subway on the T (Third Street) rail line. BART recently retired its old equipment to concentrate on using a new fleet. Caltrain began electrified operation between San Francisco and San José on Aug. 11 and is replacing almost all its fleet. The question of how long those providers can continue to run service with such new infrastructure and equipment without falling off the looming fiscal cliff remains unanswered. Time will tell about that, too.

The other major transit network in the state is in Los Angeles and is operated primarily by the Los Angeles Metropolitan Transit Authority (Metro) and Metrolink, which runs trains in the region. We will examine the situation in and near the City of Angels in our next report in this series.

David Peter Alan is one of North America’s most experienced transit users and advocates, having ridden every rail transit line in the U.S., and most Canadian systems. He has also ridden the entire Amtrak and VIA Rail network. His advocacy on the national scene focuses on the Rail Users’ Network (RUN), where he has been a Board member since 2005. Locally in New Jersey, he served as Chair of the Lackawanna Coalition for 21 years and remains a member. He is also a member of NJ Transit’s Senior Citizens and Disabled Residents Transportation Advisory Committee (SCDRTAC). When not writing or traveling, he practices law in the fields of Intellectual Property (Patents, Trademarks and Copyright) and business law. Opinions expressed here are his own.