For Public Transit, the Stimulus Is a Lifeline — But a Short One

The $900 billion pandemic stimulus package that the U.S. Congress passed on Monday night includes $14 billion of aid for public transit — enough to halt the sweeping service and staffing cuts thatseveral of the nation’s largest transit agencies had said could be imminent.

But it’s not enough to close the pandemic-sized holes blown through agency budgets. 

“This will buy agencies critical time and should stave off transit cuts for the immediate future,” stated an analysis of the bill by TransitCenter, a think tank. “To fully bridge the COVID budget gap, however, further rounds of funding would need to be secured from federal, state or local sources.”

This includes New York City’s Metropolitan Transportation Authority,which stands to receive at least $4 billion from the stimulus, or nearly 30% of total funds, according to officials. The agency had previously projected a $16 billion shortfall due to Covid-19 through 2024.

“This crucial funding will allow us to get through 2021 without devastating service cuts and layoffs of over 9,000 colleagues,” said Pat Foye, MTA CEO and chairman, in a statement. “To be clear, we are still facing an $8 billion deficit in the years ahead, but this is a promising first step that will help protect the local, state and national economies in the short term.”

The scale of the funding gap nationwide is similarly vast. The American Public Transit Association, an industry group, has said that it would take $32 billion to bring the nation’s transit offerings back to pre-pandemic levels. The new stimulus will reduce that gap, but transit riders and transit workers could still face huge challenges, especially if millions of commuters don’t swiftly return to riding after the pandemic eases. 

In San Francisco, for example, existing service cuts due to ridership losses and labor shortages will stay in place, says Jeffrey Tumlin, the executive director of the San Francisco Municipal Transportation Agency. The new aid from Congress would likely be enough to postpone 1,200 layoffs proposed in a budget plan the agency had previewed earlier this month. “It stabilizes us at our current 70% service level,” he said. 

The exact amount of funding to which individual agencies would be eligible is yet to be determined. The Federal Transit Administration is set to distribute the money to urbanized regions (whose authorities then apportion the funds among local transit operators) following the same formula it uses with normal transportation spending bills. This was also true of the CARES Act, the pandemic relief package passed in March that included $25 billion for transit. 

But experts say that the new bill is more attentive to the degree of need among big-city systems than the CARES Act was. The new bill sets a limit on the total amount of pandemic aid eligible to any one urbanized area at 75% of that area’s 2018 transit operating costs. Whatever is left over would be dispersed to other regions until they hit their cap.

This change is important because not all transit systems have been equally affected by the pandemic, said Yonah Freemark, a senior research associate at the Urban Institute. When ridership tanked in the spring, big-city systems with budgets that depend heavily on fare revenue ran out of money faster than smaller cities that serve fewer people, and the funding formula used in the CARES Act didn’t account for those differences. The new bill partly remedies that unevenness by directing more funding to agencies with bigger budget holes. 

The nation’s largest transit agency, New York’s MTA, is now set to receive a proportionally larger amount of the new bill’s funding. Other agencies in line for a heftier share are Bay Area Rapid Transit, the Washington Metropolitan Area Transit Authority and King County’s Metro Transit, which serves Seattle, according to a TransitCenter spokesperson. Those agencies had all projected budget shortfalls in the hundreds of millions for the next fiscal year. 

“Given that the point of this legislation is to address the significant loss in revenue, I think it’s fair to say that we need to account for differences in the agencies over time,” Freemark said. 

Rachel Cohen, the communications director for Senator Mark Warner, a Virginia Democrat and one of the original bipartisan group of senators who architected the bill, said that Warner had “pushed” to structure the funding this way. “Given the limitations of the package, we think this is a win for big transit agencies,” she said. 

The reliability of those larger urban bus and rail systems is essential to the broader economic recovery, transit supporters say. U.S. public transportation agencies have continued to provide more than 70 million trips per week even as Covid-19 infection rates reach new heights. If ridership does not rebound and service cuts become permanent, advocates warn that workers who can’t afford alternative transportation would be left stranded; others will take to cars, adding congestion to the roads and carbon emissions to the atmosphere. 

“No change to the formula makes up for the fact that this $14 billion is less than half of what the transit industry needs to avoid devastating service cuts and layoffs,” said Jenna Fortunati, a policy and communications associate at Transportation for America.

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