Eno Center for Transportation inferred the transit agencies and modes most at risk for budget deficit by evaluating the pre-pandemic farebox recovery ratio at the 50 largest U.S. The pandemic and subsequent work-from-home trends have profoundly impacted farebox recovery ratio, which is the share of a transit agency’s operating expenses covered by its fare collection. The National Campaign for Transit Justice (NCTJ) and T4America conducted a sample survey to paint a picture of the fiscal health of transit agencies around the United States as they approach the two-year anniversary of the last emergency relief package. As a result, most transit agencies are anticipating a steep, sudden operating budget deficit that will deepen annually, absent other forms of funding. Transit agencies are facing a financial triple whammy – one-time payments from COVID-relief funding are drying up, fare collection has stabilized at well below pre-pandemic levels, and expenses are growing because of inflation, tight labor markets, and supply chain disruptions. And for many transit agencies, the cliff is coming very soon-in some cases, as early as next year. These forces combined have resulted in the transit fiscal cliff: the operating budget deficit expected at transit agencies across the country once their federal relief runs out. Ridership still hasn’t returned to pre-pandemic levels, and workforce shortages have only applied additional stress. However, this funding alone was not enough. And the federal government stepped in, rolling out three separate emergency relief packages, and incorporating increased support for transit agencies in the Infrastructure Investment and Jobs Act (IIJA). Without fare revenues, transit agencies no longer had the funding to cover their operating costs. When the Covid-19 pandemic caused national lockdowns, ridership plummeted, causing revenues from fare collection to drop to almost zero. Even with relatively stable ridership, transit agencies were already struggling to make ends meet. Note: Some sections of this post initially appeared on Transportation for America’s blog, and are reprinted here with permission.Īccording to the American Public Transportation Association, in the five years leading up to the pandemic, ridership was slowly declining across a range of transit agencies.
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