Who is hiding $2b in Bay Area transit rescue funds?

An obscure, unelected board is hoarding billions of dollars that could save Bay Area public transit from a death spiral.

By Annie Lloyd and Joty Dhaliwal

As vaccinations increase and California reopens, local governments and boards will be responsible for their jurisdiction’s recovery from the COVID-19 pandemic. The $1.9 trillion COVID relief spending package President Biden signed into law on March 11 provides a crucial lifeline for this recovery, but there is a hitch: State and local implementation is required to “turn on the money hose” to deliver jobs and vital services to struggling working-class communities of color. 

Before federal dollars can have their intended impacts on the ground, city, county and state governments—and in some cases, obscure unelected boards—must decide how and when to spend those funds. 

In the Bay Area, one of the obscure unelected boards managing the money is the Metropolitan Transportation Commission (MTC). MTC now stands between the $1.7 billion in ARP funding for public transportation in the Bay Area and the local transit agencies it oversees—all of which desperately need the money to restore service and jobs. 

Rather than spending to recover from the crisis, which is the whole point of a stimulus package, MTC’s aim is to hold back as much of the ARP funds as it can for a future “rainy day,” by refusing to allocate the money in time for transit agencies to put it into their budgets for the ‘21-’22 fiscal year. Instead, they intend to allocate most of the funds at the end of July, weeks after the July 1 budget deadline. 

MTC is sinking a unique opportunity to accomplish a true recovery. Instead, they are playing into their own pessimistic outlook for public transit. In fact, MTC’s draft Plan Bay Area 2050 projects that pre-pandemic transit service will not be restored until 2035. 

As riders (including students returning to school) return to transit, they will find continuing low levels of service, long wait times, and overcrowded buses. Those with other options will abandon transit. And unemployed workers who might otherwise have access to a flood of openings for good-paying union jobs as operators and mechanics will be left to drive for Uber and Lyft. 

The COVID-19 transit crisis

The pandemic’s impacts on transit have been dire. Before Biden signed the ARP into law, Labor Notes reported that by September 2020, “half of U.S. transit agencies surveyed had cut service levels by 25 percent or more, responding to reduced state and local revenues. Two rounds of federal emergency funding for transit, in March and December, fell $18 billion short of filling the gap. Many systems are facing major new service cuts and layoffs in 2021.”

The Bay Area has been no exception. Our two dozen transit agencies continue to run service well below already inadequate pre-pandemic levels—ranging from a low of under 40% of pre-pandemic service for some commuter rail and ferry agencies to a high of about 80% for predominantly bus systems like AC Transit and Santa Clara Valley Transportation Authority (VTA). Ridership to downtown San Francisco has suffered the steepest declines, and local travel by frontline workers and transit-dependent residents, largely people of color, now provides the bulk of transit ridership. AC Transit, for instance, now carries more riders than BART. Prior to COVID, AC Transit carried less than half as many riders as BART.

Transit agencies are developing their budgets for the fiscal year beginning July 1. While plans to restore service cuts vary, most agencies are assuming that service will remain at depressed levels for at least a year. AC Transit, for instance, has proposed a “Service Recovery Timeline” that would not bring back lost service levels until August of 2022.

How does this play out for the ordinary people who need transit every day? During the pandemic, AC Transit riders have become familiar with the sight of partly full buses passing them by over and over. Because safety guidelines require passengers to keep six feet of distance on buses, each bus has a dramatically reduced capacity. The obvious safe solution is to run many more buses while maintaining safe distancing. Increasing service requires budgeting for the additional cost, which agencies will have a much harder time doing without an idea of how much ARP money they can expect.

Instead of seeking to restore service, agencies have toyed with the idea of reducing social distance on our buses before it is safe to do so. On March 24, AC Transit board brought a proposal to reduce, and then eliminate, social distancing. This was universally opposed by transit workers and riders alike, who argued that the solution to overcrowding and rider pass-ups was to run more service with abundant federal funding.

Where has MTC been?

Before transit agencies can budget or spend a penny of ARP funding on restoring service or other priorities, MTC must allocate a share of the money to each. In April, even though the funds had been available for over a month, MTC had not yet even placed the matter on its agenda. 

It’s clear that the MTC doesn’t care much for the urgent needs of working people. They are sitting on billions of dollars that could fix transit and refuse to prioritize plans to discuss spending it. 

In a March 23 letter to MTC, the Bay Area’s labor councils, transit locals and other unions asked MTC to prioritize the ARP funding “to restore 100% of pre-pandemic transit service hours as rapidly as possible.” After re-submitting their letter with dozens of rider and community groups signed on, they received a response from MTC chair Alfredo Pedrosa, a Napa County Supervisor. He stated that MTC was working with transit agencies to ensure that the ARP funds resulted in “not only swift—but also sustainable—renewed service levels.” 

“Sustainable,” here, means the lowest possible service they can get away with. This became clear through MTC’s response to public comment at its monthly Programming and Allocation committee meeting on April 14. Three members of East Bay DSA’s People’s Transit Alliance gave public comment at that meeting, pressing MTC on its failure to prioritize putting the federal stimulus money in local transit agencies’ hands. They noted that transit agencies needed their share of ARP funds to bring back service as ridership grew. Crucially, they explained that riders would not return to transit if it wasn’t there when they needed it, and that MTC’s delay would force agencies to adopt austerity budgets for the July 1 fiscal year, threatening a death spiral for public transportation.

The comments touched a nerve, prompting a rare response by both the committee chair, Sonoma County Supervisor David Rabbit, and MTC’s executive director, Therese McMillan. Rabbit stated that at Golden Gate Transit, on whose board he sits, “we’re not looking for the ARP to balance our budget in this next fiscal year.” He failed to note that Golden Gate’s balanced budget assumed ongoing austerity levels of service. 

McMillan then confirmed that MTC will decide on ARP funds too late for agencies to budget them in the fiscal year that begins July 1. She stated that “in May and June, we will be framing up the process by which we will be considering this $1.7 billion.” She emphasized that “it is extremely important that we carefully consider how best to use these funds to not only establish critical increases and transit service, but to sustain them going forward.” Again, MTC officials use the idea of sustainability as a euphemism for providing the bare minimum.

Does MTC care about public transit?

Since last year, MTC has repeatedly questioned whether restoring transit to pre-pandemic levels made sense, referring to the need to “right-size the system and establish a transition glide path” to permanent lower service levels. MTC believes that transit agencies should not bring back more service than they can run indefinitely. This will turn into a self-fulfilling prophecy if agencies are unable to put more buses back on the road. Throughout all of its predictions, MTC projects a narrow understanding of the role public transit can occupy in a region. It has a small vision of public transit, conceiving of it as mostly just a commuter system for white-collar workers. As a result, now that many of those commuters are gone, MTC can only imagine it playing an even smaller role in the region. And most riders would agree that Bay Area transit didn’t even work well as a commuter system to begin with, so cutting service is further salt on the wound.

Transit agency management have adopted this mantra of sustainability as well. To demonstrate that restored service levels would not be “sustainable,” agency CFOs have forecasted 10-year deficits and decreases in ridership. These forecasts come from private speculation and assumptions, with agencies rarely revealing their method for coming up with forecast numbers. When questioned, as VTA’s CFO recently was, about the basis for forecasting something as unprecedented as restoring transit aftermath of a global pandemic, she admitted that it was impossible to forecast ridership. She also revealed that the agency had consistently made overly-conservative projections of revenues in the past year.

Through this lack of urgency and refusal to apportion funds in time for the upcoming year’s budgets at local transit agencies, MTC has made its stance clear. Left to its own devices, public transit agencies in the Bay Area will be forced to sign their own potential death certificates.

Riders and drivers fighting together to save transit

A rally and march to MTC headquarters on May 6 will demand that MTC “stop starving our transit” and “unlock our transit money now.” Speakers from labor, transit rider groups and more will talk to the press at the Salesforce Transbay Terminal, and then walk two blocks south to MTC’s offices for a banner drop and to reflect on what transit means to them, taping their answers to the building wall. Organizers hope that their demands to “turn on the money hose” will be heeded when MTC’s committee finally takes up the question of the ARP funding at its meeting on May 12.

To follow updates and to learn more about the EBDSA project that is co-organizing this rally, follow @peopletransit on Twitter and check out peoplestransit.org.