A group of state legislators called on leadership this week to protect funding for public transit systems after Gov. Gavin Newsom suggested cuts in his proposed budget.
The letter — addressed to Senate President pro Tempore Toni Atkins, Assembly Speaker Anthony Rendon and the chairs of the budget committees and subcommittees in the Senate and Assembly — argues that the state’s transit agencies, still reeling from the COVID-19 pandemic, will require state funding support to stay afloat in the coming years.
Ridership for most of the state’s transit operators, including those in the Bay Area like BART and the San Francisco Municipal Transportation Agency, has yet to come close to pre-pandemic levels on a consistent basis.
That has led to ominous forecasts about nine-figure deficits and deep service cuts in the latter part of the decade without a full rebound to pre-pandemic ridership or a new funding source.
“Transit agencies across California are at risk of drastic service cuts due to large near-term operating budget shortfalls,” the legislators wrote in the letter. “For some agencies, these budget shortfalls pose an existential threat to their long-term viability.”
Sens. Scott Wiener, D-San Francisco, and Bill Dodd, D-Napa, and Assemblymembers Mia Bonta, D-Oakland, Matt Haney, D-San Francisco, Diane Papan, D-San Mateo, Marc Berman, D-Palo Alto, and Dave Cortese, D-San Jose, were among the 13 signatories of the letter, which was sent to legislative leaders on Wednesday.
The red alert from lawmakers comes just over a week after Newsom detailed his proposed budget for the 2023-2024 fiscal year with the state facing a budget deficit of some $22.5 billion.
Newsom proposed delaying roughly $7.4 billion in spending to which the state had committed between 2021 and 2024 while pulling back on nearly $6 billion in spending that had been planned over the previous two fiscal years.
Those cuts and delays include reducing the $7.7 billion previously allocated for transit infrastructure funding by $2 billion over three years and shrinking the Transit and Intercity Rail Capital Program (TIRCP), which funds modernization projects for rail, bus and ferry systems, from $2 billion annually to $1 billion.
Adina Levin, the advocacy director for transportation advocacy nonprofit Seamless Bay Area, said in a statement this week that the budget and its proposed cuts undermine the state’s transit and climate goals.
Levin also argued that potentially relying on federal funding to make up for the cuts is “dubious at best,” given that federal legislators are likely to haggle over the federal debt ceiling later this year.
“In the coming months, it will be important for California transit leaders, legislators, and advocates to work together to advocate for a more robust and sustainable level of state transit funding,” Levin said.
Newsom argued in his budget announcement on Jan. 10 that some of the proposed cuts and delayed funding are so-called trigger cuts, and that previously planned funding would be restored as soon as 2024 if the state’s balance sheet rebounds from the nearly $30 billion year-over-year drop in capital gains tax revenue that it currently faces.
The state also still has some $35.6 billion in reserves, Newsom noted, but state officials do not intend to dip into that pot of funding unless economic conditions worsen.
Nonetheless, transit officials and advocates have sounded the alarm about the proposed cuts as federal relief funding from the pandemic’s first two years is expected to dry up by the middle of the decade for most agencies, if not sooner.
“I can’t say I understand the choices that Governor Newsom has made in the budget he released,” BART Board President Janice Li said Friday.
Li said avoiding paying for critical transit needs in the present will only make it more expensive in the future, pointing to examples like delays and mechanical issues with aging BART trains and other infrastructure.
“When we don’t keep up, we really feel the impact,” she said. “So this is just once again not making good decisions about the needs that we have to maintain.”
BART budget officials have forecast that the agency will exhaust its remaining federal relief funding by September 2025 and will subsequently go over a “fiscal cliff” of nine-figure deficits.
In a five-year financial outlook prepared late last year for the Metropolitan Transportation Commission, the region’s transit coordination agency, BART would face projected annual deficits of roughly $125 million beyond 2027 even with 85 percent of the agency’s pre-pandemic ridership returning in full.
That projected deficit would climb to $233 million per year, according to BART budget officials, if fare revenue remains stagnant.
BART officials have also noted that the agency cannot make meaningful cuts to shore up its deficits, as doing so would require BART to eliminate service on the Richmond-Millbrae and San Jose-Daly City lines, close nine stations, reduce service to weekdays only and limit trains to arriving just once an hour.
The legislators argued in their letter to leadership that the loss of public transit service would have a cascading effect on the state’s goals of combating climate change and reducing carbon emissions.
They also argued that the state should honor previously committed funding for TIRCP projects, some of which are already in progress, to avoid further destabilizing transit agency budgets.
“Allowing the state’s transit systems to unravel would have long-term, possibly irreversible, devastating impacts on California’s transportation system and climate goals,” they wrote in the letter.
The legislators also called for dedicated relief funding in next year’s budget to help transit operators further shore up for future deficits if ridership statewide does not rebound beyond its current levels.
Newsom will release a revised budget proposal in May based on updated revenue totals. State legislators will have until the end of June to negotiate and approve the final budget.
Bay Area transit operators have discussed potentially placing a regional funding measure for transit on a future ballot, but doing so is more likely on the 2026 ballot than in 2024, according to Li.
“We’re not saying that the governor has to fund transit operations so that we can survive indefinitely,” she said. “I think we are really coming together with a very strong, clear, concise plan of how we keep transit operators surviving and have a pathway to thriving in the future.”