Transit scrambling for more revenue as ‘fiscal cliff’ approaches
(The Center Square) – In the San Francisco Bay area, transit officials are looking for ways to raise $1 billion they say is necessary to keep their agencies afloat in the post-pandemic world.
The Metropolitan Transportation Commission is considering sales tax, income tax, payroll tax and a road user charge as instruments to fund a 2026 ballot measure that would fund the revenue earmarked for transit.
The Metro Transportation Commission website promoting the idea stated, “Transit’s Future Depends On New Funding.”
The $1.9 trillion American Rescue Plan Act was the last of three pandemic stimulus laws passed that gave $218.2 billion to transportation and must be spent by Dec. 31, 2026.
The Pittsburgh Regional Transit stated that it used $95.7 million in ARPA funding to balance its fiscal year 2023 budget.
The Urban Institute, a Washington D.C. think tank that advocates for more government spending on transit, released a report this month that said transit was facing a “fiscal cliff” once federal emergency money dried up.
“Though the federal government provided aid that prevented massive cuts during the pandemic’s first two years, many transit agencies are now facing a fiscal cliff because that funding is coming to an end and ridership has failed to fully return to pre-pandemic levels in most places, limiting fare revenues,” the Urban Institute’s report stated. “For many agencies, this cliff is only the latest challenge to emerge from decades of unstable, varying funding levels that have threatened their ability to provide reliable, effective, desirable service.”
The Urban Institute’s report suggested potential revenue streams for transit such as new property taxes and land value taxes, income taxes on high-income people, parking and vehicle user fees and new tolls.
Baruch Feigenbaum, senior managing director of transportation policy at the Reason Foundation, said transit agencies are looking for new taxes for a different stream of revenue.
“I think it is what transit agencies hope is the future,” Feigenbaum told The Center Square. “This is the approach they are taking. I’m just not sure it is the best approach.”
Feigenbaum said costs have increased despite a drop in transit ridership. He said transit needs to “reimagine” its services such as consider on-demand services as opposed to adding more fixed routes.
