Here we go again. Bay Area Rapid Transit (BART), which provides rapid-transit service throughout the San Francisco area, is again holding taxpayers hostage by demanding a massive bailout to forestall threatened cuts. The agency’s own website declares that “BART is facing a fiscal cliff” and argues, “Cutting service and scaling back on cleanliness and safety efforts will only trigger a transit death spiral. People will not use BART if they must wait too long for a train or if the experience declines.”
Agreed on both points, but there’s no evidence that another infusion of state or federal funds will put the system — or other transit systems in California — on a sustainable path. Gov. Gavin Newsom, who had tried to delay a $750-million loan (from his budget deal) to the region’s multiple transit systems, including BART, has relented. He issued a terse statement: “We are working with all stakeholders on the parameters of a funding deal. Our shared goal is to agree on the terms of a deal by this fall.”
It’s absurd to give the agencies more money before they get serious about cutting costs.
It’s absurd to give the agencies more money before they get serious about cutting costs. There’s one thing Bay Area transit agencies won’t do, of course, and that is to rein in their compensation packages. As Govern for California’s David Crane told lawmakers (as reported by CalMatters columnist Dan Walters), “Between 2019 and 2024, BART’s boardings fell 57 percent yet staffing grew and annual payments to employees rose an astounding 32 percent. That’s a big problem because payments to employees now amount to $171,000 per employee. … But their payrolls soared as ridership declined 140,000 in 2019, and constitute 54 percent of BART’s net operating expenses.”
A quick perusal of the Transparent California database shows the eye-popping compensation packages that BART pays out even as it cries poor mouth. Based on the latest data (2022), I count 100 BART employees who received between $308,000 and $535,000 in total compensation (including pensions, other benefits, and overtime).
BART says that it is controlling labor costs, but its statement points only to these minor reforms: “Implement a strategic hiring freeze while protecting safety and service quality” and “Renegotiated with unions to reduce near term retiree healthcare costs.” Government transit systems do a terrible job of focusing on customers. Instead, they spend like crazy, offer crummy service, then beg taxpayers for more money — and threaten to shutter popular routes if they don’t get their way. If they get another bailout, they’ll be in the same predicament soon enough.
Nevertheless, you can bet that they’ll get some sort of bailout. Meanwhile, the Metropolitan Transportation Commission wants voters to approve a new sales tax to keep these systems afloat — a measure that the Senate has approved. The loan is designed to tide the agencies over until voters presumably approve it in 2026. One idea, which was too bone-headed even for California officials: create a new super-bureaucracy to oversee all the region’s other transit bureaucracies.
When private-sector companies face reduced revenues, they struggle to keep the quality of their products or services high while slashing unnecessary expenses. BART and other agencies acknowledge the potential death spiral. If they cut services, they’ll have fewer customers, and that will further erode revenues, which will force them to further cut services. Rinse and repeat. Yet that hasn’t stopped them from threatening painful cuts. Government agencies are incapable of acting in a businesslike manner, even when they understand the economics.
As the San Francisco Standard reported: “In the worst-case scenario, the San Francisco Municipal Transportation Agency would have to cut Muni service by 50 percent, axe reduced fare programs and cut back on street improvements, according to a source with direct knowledge of the agency’s finances. BART could cut the Red and Green lines entirely, eliminate service on weekends and after 9 p.m., and reduce weekday service to one train per hour on the remaining lines.”
Granted, the hysteria is almost entertaining, but the reality is that transit systems haven’t been on a sustainable path for many years. BART blames the pandemic shutdowns and an increase in remote work for reducing ridership numbers. But those numbers had been falling long before anyone had even heard of COVID-19. A 2019 report from Golden Gate University’s School of Law found that BART had lost 6.2 percent of its riders in the previous three years. The Bay Area isn’t unique. The Southern California Association of Governments found in 2018 that only 2 percent of that region’s residents use transit “very frequently.”
Recently, BART ridership was down 75 percent at some suburban stations. BART’s post-pandemic ridership recovery is among the worst in the nation. A Berkeley Economic Review article from last year found that, “The national average for transit ridership has bounced back to 80 percent of what it was before the pandemic: a slow, but steady recovery, as more commuters have gone back to traditional types of work. However, BART’s ridership has only reached the aforementioned meager 42 percent of what it was in 2019.”
There are a number of legitimate economic reasons related, in part, to the Bay Area’s tech-based economy, declining population in San Francisco, and whatnot, but transit advocates refuse to acknowledge one of the key factors: BART’s service is pretty bad. Most recently, a computer-related problem shut down the system for hours — the second time it faced such a widespread outage in four months. BART’s crime problems have plummeted after officials got serious about it, but many people wisely just choose their cars or Uber.
Transit is an important service in congested urban areas. But those lawmakers and activists who are most committed to it ought to start holding these agencies accountable. Walters’ headline said it all: “Bay Area transit systems want more money. But their payrolls soared as ridership declined.” If the public is expected to endure more financial pain, then transit employees ought to endure it, also. Transit systems have only themselves to blame that they’re teetering on the fiscal cliff.
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Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].