Things aren’t going well for California transit agencies. Most still haven’t recovered to pre-pandemic ridership. New electric buses are breaking down. And they’re in a funding crisis since the diesel fuel tax is bringing in less money as people switch to electric vehicles.
To get a grip on how to react, state legislators in 2023 created a task force to find ‘transformative’ solutions to all their problems.
That task force released its final report last year, which landed with a thud. In the end, it just asked the same questions it was supposed to answer.
State Senator Catherine Blakespear told Times of San Diego the report was completely underwhelming.
The legislator hoped it would explore which potential funding sources were viable options. Instead, it ignored some options, like developing transit-owned land to generate revenue.
“It essentially ended with where it started,” the senator said. “It ended with the same question it started with, which is, we need to figure out a funding source.”
That’s especially frustrating, she said, because legislators delayed proposing their own solutions while they waited for the task force’s report.
“This doesn’t provide any type of a roadmap for a legislator like me to say, ‘Ok this is an option or here’s some options that I can propose,’” Blakespear said.
The report may not have provided a route for legislators to fix transit agencies, but it did specify a few problems contributing to the immediate financial cliff many are facing. Operating costs are rising faster than revenues, and safety concerns have forced agencies to increase spending on security guards.
For instance, the San Diego Metropolitan Transit System gets 32% of its revenue from local sales taxes — but sales tax revenue has stayed flat for several years while pay for bus operators increased 40% since 2019. The agency now expects a $120 million budget shortfall by 2029.
The report also looked into the state requirement to switch to an all-electric bus fleet by 2040. That has reduced transit reliability by 18%, because the pricier zero-emission buses break down more often and receiving parts to fix them takes longer. Manufacturers are not keeping up with demand. It’s also costly as some diesel buses are retired before reaching their end of life, workforces need to be retrained, re-fueling stations built, and maintenance infrastructure modernized.
The report focused more on identifying those problems than solving them. However, legislators already knew a lot of the problems– which is why they formed the task force.
Even people on the task force expressed frustration with its results. MTS CEO Sharon Cooney said in written responses to questions that her experience on the task force was informative but often discouraging.
“The legislature expected solutions to support sustainable transit funding, and the report fell short of providing sufficient detail and recommendations for this issue,” Cooney said.
In particular, Cooney said the report lacked detail on fixing funding and reforming the Transportation Development Act.
“There was limited focus on prioritizing discussion items to identify new, sustainable transit funding mechanisms,” Cooney said. “State transportation funding formulas in many cases are decades old and need to be modernized.”
The 1971 Transportation Development Act funds local transit operations through a diesel fuel tax and state-wide sales tax. That fuel tax comes with requirements for agencies to recover a share of expenses through fares, and to meet certain efficiency standards. Many agencies struggle to meet those standards, so they opt not to provide transit access at costly times or difficult locations, which limits access to some transit-dependent riders.
Plus, that funding is set to decrease as the public switches to electric vehicles. Fuel-tax revenue is expected to decrease by a third, or $300 million, by 2035.
“Fare box recovery is never going to make transit fully self-sustaining, so there has to be another revenue stream, and that just was not dealt with,” Blakespear said.
Now Blakespear is scrambling for solutions after waiting two years for the report. The financial state of transit agencies has only worsened.
“I’m talking to other stakeholders and trying to figure out what seems possible in a multi-billion dollar, multi-year budget deficit,” Blakespear said.
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