Transit agencies scramble to piece together funding as ‘fiscal cliff’ looms

You're reading Route Fifty's State and Local Roundup. To get the week’s news to use from around the country, you can subscribe here to get this update in your inbox every Friday.

The San Francisco area’s BART transit system faces a financially dicey future, after a key state lawmaker pulled back his proposal to shore up its bottom line with a temporary toll hike on Bay Area bridges.

State Sen. Scott Wiener, a San Francisco Democrat, said on Monday that he would “pause” discussions about the bridge tolls in order to find additional funding sources for BART and other local transit agencies. Across the country, transit agencies that depend heavily on fare revenues face a “fiscal cliff” in the near future when federal pandemic aid runs out. Ridership on these systems (and, therefore, fare revenues) have not returned to pre-pandemic levels.

“It’s hard to overstate the peril facing our Bay Area transit systems,” Wiener wrote on X, the site formerly known as Twitter. “They’re absolutely recovering from the pandemic—over the past year BART ridership increased 50% & Muni ridership increased 33%—but not quickly enough to compensate for the end of federal pandemic relief.”

Wiener’s original proposal to raise tolls by $1.50 on Bay Area bridges created a backlash among suburban officials in the area. Seven Democratic members of Congress sent a letter to Gov. Gavin Newsom and state legislative leaders arguing that the higher tolls would disproportionately harm East Bay residents. They noted that drivers could face as many as four toll hikes in six years on the bridges if current proposals before lawmakers were enacted. The total cost could reach $9.50 to cross one bridge by 2025.

“We’re concerned that this legislation will disproportionately impact our constituents and low-income communities who depend on driving for their transportation to and from work, and ultimately does not provide long-term, sustainable solutions for some of the operating issues of the Bay Area public transit agencies,” they wrote.

Wiener’s proposal faced significant opposition among state lawmakers from the East Bay, as well.

But Streetsblog California editor Melanie Curry questioned the notion that toll hikes would disproportionately hurt low-income people living in East Bay communities.

“No one wants to pay more to get to work, but many of those outlying areas are served by buses and trains right into city centers, and while transit doesn't work for everybody, without it even the roads won't work. In addition, while high tolls are a pain, they pale in comparison to the rest of the costs of driving, including car payments, parking and fuel. And low-income people are the ones who suffer most when public transit is inadequate,” she wrote.

Advocates at the San Francisco Bay Area Planning and Urban Research Association found that people riding BART on a typical fall 2022 weekday had a median income of $107,000—that’s $22,000 less than bridge drivers’ median income. BART riders were also more likely to come from households earning less than $50,000 a year. 

The West Coast debate echoes another high-profile fight on the East Coast, where prominent New Jersey politicians have tried to thwart New York’s plan to impose tolls on any vehicle entering lower Manhattan. The revenue from New York’s “congestion pricing” scheme would benefit the local transit agency, although the revenue generated would go toward the Metropolitan Transportation Authority’s capital budget to improve subways and other physical infrastructure instead of to day-to-day operations.

Both California and New York state lawmakers tried to help their transit agencies avoid a fiscal cliff, but the response in Albany was more comprehensive. Lawmakers there agreed to dedicate $1.1 billion a year from payroll taxes to help fund the MTA. They also promised a share of the licensing fees from an anticipated casino in the city, and added a one-time payment of $300 million.

It was a different story in Sacramento, where transit advocates had to fight to avoid cuts in state support that Newsom originally proposed. The governor and lawmakers had to make up for a $32 billion anticipated deficit, about a 10th of the size of the state’s annual budget. Ultimately, lawmakers found $5 billion statewide through 2025 to stave off cuts to bus and rail service. But $4 billion of that is capital money that transit agencies can now use for operations. 

Wiener said Bay Area systems face operating deficits totaling $2.5 billion over the next five years, but after the state money is divided up, transit agencies in the region would get $400 million over four years.

“The state budget solved 16% of the problem,” he wrote. “That leaves 84% of the problem completely unresolved.”

The toll increases were supposed to cushion some of that blow. But now transit agencies will have to wait to see whether lawmakers can find another source of revenue. “It’s very disappointing, and it’s a blow to our efforts to maintain Muni service after federal pandemic relief funds run out next year,” San Francisco Municipal Transportation Agency spokesperson Erica Kato said.

Across the country, many other transit systems face similar financial predicaments. In the Washington, D.C., area, subway and bus operator WMATA faces an operating deficit of $750 million starting next summer. Transit agencies in the Chicago area warn that they will soon face a $730 million shortfall on their own. New Jersey Transit could see shortfalls of $1 billion.

In California, Wiener warned that the economic vitality of the region hangs in the balance.

“Allowing these transit systems to deteriorate will also severely undermine our economic recovery, particularly for downtown San Francisco. Leaders who [say] they want downtown San Francisco to recover need to step up to fight to save public transit,” he wrote. “To be blunt, few have done so.”

Keep reading as there’s more news to use below, and make sure to come back here for the week’s highlights. If you don’t already and would prefer to get it in your inbox, you can subscribe to this newsletter here. We’ll see you next week.

News to Use

Trends, Common Challenges, Cool Ideas, FYIs, and Notable Events

• Chicago sues Kia, Hyundai for skyrocketing thefts of their vehicles. The lawsuit, filed Thursday in Cook County Circuit Court, cites a “car theft crisis” driven in large part by Kia and Hyundai’s “unlawful and reckless actions” in lagging behind other automakers that have installed “industry-standard” engine immobilizers, which prevents hot-wiring by requiring a chip-enabled smart key to start the vehicle. Like many cities, Chicago has seen car thefts skyrocket as it emerges from the pandemic. Auto thefts were up 55% in 2022. Nationwide, thefts were up 7%, surpassing 1 million stolen vehicles for the first time since 2008.


• West Virginia University slashes its budget. Protesters called for the ouster of university President Gordon Gee during a rally Monday against unprecedented proposed cuts to faculty and programs of study in an effort to save money in the face of a $45 million budget deficit. Opponents say the cutbacks would harm the school’s status as a research institution and could harm higher education across the state. Programs on the chopping block include foreign languages, creative writing, and masters- and graduate-level mathematics programs.


• Maui County sues utility. Add it to the growing list of parties suing Hawaiian Electric Co. for the role that the utility’s power lines may have played in the fires that burned across Maui. The county filed suit Thursday in state circuit court seeking unspecified damages from the utility that powers most of the state. “This destruction could have been avoided” had the utility de-energized its power lines across Maui after the National Weather Service predicted “damaging” winds that could knock down power lines, the county stated in its complaint.


• N.C. governor vetoes election bill, override showdown certain. Gov. Roy Cooper vetoed a sweeping Republican elections bill Thursday that would end a grace period for voting by mail and make new allowances for partisan poll observers. In a video message, the Democratic governor accused legislative Republicans of using their slim veto-proof majorities to execute “an all-out assault on the right to vote,” which he said has nothing to do with election security and everything to do with their party keeping and gaining power. The bill would make voting more difficult for young and nonwhite voters who are more likely to vote absentee and less likely to elect Republicans, he said.


• State lawmakers move to ban Chinese land ownership. The White House and federal lawmakers are pursuing ways to constrain Chinese-owned businesses like TikTok amid a bipartisan push to limit China’s reach. Now state legislators have embraced their own novel, locally focused tactic: restrictions on Chinese land ownership. Lawmakers in 33 states have introduced 81 bills this year that would prohibit the Chinese government, some China-based businesses and many Chinese citizens from buying agricultural land or property near military bases, according to a Washington Post analysis. A dozen of the bills are now law in states such as Alabama, Idaho and Virginia.
• 
  Sheriff’s office agrees to destroy evidence obtained from Kansas newspaper raid. The Marion County Sheriff’s Office agreed Thursday to destroy digital files it copied from computers seized during the raid on the Marion County Record. Police Chief Gideon Cody led the Aug. 11 raid on the newspaper office and the publisher’s home—under the pretense that a reporter had committed identity theft by looking up public information on a state website. Last week, the county prosecutor declared there was insufficient evidence to justify the raids, and a judge ordered the materials returned.


• Minneapolis mayor vetoes minimum wage ordinance for Uber, Lyft drivers. Mayor Jacob Frey on Tuesday vetoed the ordinance, a move one city councilmember described as “an inexcusable betrayal of Minneapolis workers.” Frey instead negotiated with Uber, securing an agreement for higher pay for only those drivers. Had Frey signed the ordinance into law, Minneapolis would have joined Seattle and New York City in guaranteeing minimum wages for Uber, Lyft and other ride-hailing drivers.


• Colorado’s pot tax brought in more than alcohol or cigarettes. The state generated more tax revenue from marijuana than alcohol or cigarettes during the last fiscal year, with $280 million in cannabis tax dollars going toward government programs and services like K–12 education and health care. An analysis from the state’s nonpartisan Legislative Council Staff showed that even though annual marijuana tax revenue has decreased significantly over the past two years, sales are still contributing more funds to Colorado’s budget than other regulated substances. That’s a similar story nationwide as cigarette and alcohol tax revenue continues to decline.


• First county to authorize 32-hour workweek? One of Washington state’s island counties is adopting a 32-hour workweek beginning this October. It’s one of the first counties in the nation to do so, part of an emerging trend nationwide. Like the rest of the country, San Juan County has been seeing supply chain issues, high housing costs and rising service costs. Rather than ask for a tax increase, the county opted to evaluate the workweek.


• Pornography websites aren’t complying with new Va. age verification law. Since a new law went into effect this July, pornography websites in Virginia have been required to more rigorously verify whether a person is 18 or over before allowing them to access adult content. However, an analysis by the Virginia Mercury shows the majority of these websites are not using age verification methods as mandated. Additionally, data shows that an increasing number of Virginians are using technology that can easily grant access to these websites.


• Illinois seeks to combat food deserts. The state is creating a $20 million grant program to seed independent grocers in areas that lack easy access to fresh foods under a measure signed by Gov. J.B. Pritzker. The Illinois Grocery Initiative will provide financial assistance and other support to independent for-profit and nonprofit retailers, co-ops, and local governments that open or preserve grocery stores in both urban and rural areas that lack or are in danger of losing them.

Picture of the Week

Oh my god they all met up pic.twitter.com/OQTMgXNbqj

— umichvoter ️‍ (@umichvoter) August 24, 2023

Posted on X, the photo above featuring six of the nation’s 12 women governors comes with no details about when and where it was taken. All Democrats, the governors in the picture are, from left, Arizona’s Katie Hobbs, Michigan’s Gretchen Whitmer, Kansas’ Laura Kelly, Massachusetts’ Maura Healey, New Mexico’s Michelle Lujan Grisham and Maine’s Janet Mills.

Government in Numbers

4,000

That’s a rough estimate of the backlog of divorce proceedings in New Jersey due to a severe and protracted judge shortage in the state. There’s another backlog of nearly 4,700 family law cases. Delays for fighting couples can last years, sometimes for more than a decade, reported Bloomberg Government this week. These cases are supposed to be resolved within 12 months of filing. “This is what children are growing up with: Mom and Dad stuck in limbo, having not nice things to say about each other—the whole family is walking on eggshells,” said Jeralyn L. Lawrence, a divorce and family law attorney. “That is the generation of children we’re raising in New Jersey.” The state’s judicial vacancies have persisted because it’s the only state in the nation where any senator can block the appointment of a jurist in their home county in a process called courtesy.