Transit Systems Dodge Worst Cuts for Now With $27 Billion U.S. Aid
(Bloomberg) -- The $27 billion cash infusion for U.S. transit agencies that Congress included in year-end legislation will help avoid draconian service cuts but still leaves them facing sharp declines in ridership and gas-tax revenue for years to come, according to advocates.
The measures provides $14 billion in transportation-related aid in the nearly $900 billion Covid-19 relief bill, and $13 billion in annual appropriations in the $1.4 trillion government funding measure that were both adopted on Monday.
“It buys us some more time,” said Paul P. Skoutelas, president and chief executive officer of the American Public Transportation Association, which lobbies for transit agencies. “It doesn’t solve the problem by any means.”
Skoutelas said ridership on American transit systems has dropped 60% this year from pre-pandemic levels. He estimated that it could take several years before ridership returns to anything remotely close to normal levels, despite promising developments with Covid-19 vaccine deployment.
That comes after major agencies like the New York Metropolitan Transit Authority warned of service cutbacks that would have reduced service levels by as much as 50%. The Washington Metropolitan Area Transit Authority, which serves the nation’s capital and the Virginia and Maryland suburbs, threatened to close 19 train stations and cut weekend rail service altogether.
Former U.S. House Transportation and Infrastructure Committee Chairman Bill Shuster, a Republican who represented a Pennsylvania district, said it would be about three or four years before riderships fully rebound, especially with the increase of the number of people working from home.
“I think it’s a temporary fix for transit systems to get through 2021 and part of 2022,” he said of the appropriations adopted this week.
Shuster said systems would likely have to consider increasing the use of automation to make ends meet long-term, which he acknowledged would likely rankle labor unions.
“The biggest expense is personnel,” he said. “If any system can be automated, it’s rail. We know exactly where it’s going. It’s not going to be automatic, so it’s not going be massive layoffs. It’s something they’ll seriously have to look at.”
A spokesperson for the U.S. Federal Transit Administration said the agency would review the legislation “to ensure provisions related to public transportation are implemented quickly and in accordance with federal law.”
Skoutelas said the infusion of stimulus money “is good news, but it’s less half of what the calculated need was.” He added that the $13 billion in annual appropriation for transit systems was previously set aside by the 2015 transportation bill that was extended by Congress earlier this year. That money comes in part from the 20% of federal gas tax receipts that are earmarked for the mass transit account in the U.S. Department of Transportation’s highway trust fund.
“No one’s got a crystal ball here, but my sense is it’s probably going to take a couple of years before we’re getting back to anything close to normal,” he said. “The industry done an incredible job demonstrating its commitment to cleanliness, and obviously there’s vaccines, but at the end of the day it’s really going to be about getting this economy moving again.”
Former U.S. Transportation Secretary Rodney Slater, who served in the Clinton administration, said it was significant that Congress included funding for transit systems, even as funding for state and local governments fell victim to squabbling between Democratic and Republican lawmakers.
The fact that the measure was passed on a bipartisan basis as a source of optimism for future transportation funding, he said. “They do so because they recognize these services are essential to moving essential workers,” he said.
Congress will have another opportunity to provide a shot in the arm for transit agencies with the reauthorization of transportation funding set to expire in October 2021.
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