Behind the Transit 'Bailout' | Opinion

California Governor Gavin Newsom recently stepped up to provide California transit agencies with financial assistance that immediately averts an impending "fiscal cliff." This is great news for Californians. Absent additional funding, transit agencies would have had to cut service or raise fares dramatically to make ends meet, which would make service inaccessible to many.

Yet the media's insistence on describing the support as a "bailout" sours the victory. "Bailout" suggests that California's transit agencies acted recklessly, self-inflicting their own financial turmoil.

That's not true. But the implication could undercut transit leaders' ability to secure ongoing funding, now or in the future. Each of our agencies—along with countless others—is confronting a fiscal cliff, so we must shift this narrative now.

Why the bailout framing is incorrect.

Let's be clear about the conditions that caused public transit to need assistance at this moment.

Riders pay to ride public transit, and their fares directly fund operations. Before the pandemic, farebox revenue paid for a consistent and substantial chunk of transit operations. According to the National Transit Database, fares funded about 75 percent of operating costs at BART, about 50 percent at CTA, and 40 percent at WMATA in the 2010s. New research from the Urban Institute indicated that transit agencies like ours have been fiscally responsible, keeping our operations costs stable from 2010-2019.

In 2020, public transit agencies were hailed as integral to the COVID-19 response, running service like normal so essential workers could get to work while everyone else stayed home. Ridership and fare revenue plummeted. Meanwhile, operating costs rose as the pandemic necessitated PPE, overtime pay, thorough cleaning regiments, and inflation soared. The pandemic was an anomaly that upended transit agency operations and their ability to collect a major source of revenue. Transit agencies couldn't have predicted or prepared for it.

Today's budget crisis is simple math: For several years, transit agencies have had lower revenues than costs.

Federal pandemic relief funding for transit operations filled the gaps temporarily, and for that, we are beyond grateful. We tightened our belts and trimmed costs where we could to stretch the aid funding—we froze hiring, eliminated trips, started service later, and closed it down earlier. But that aid is drying up now.

The reality that running buses and trains depends on charging a fee for the rides is unusual among public services. Readers don't pay to rent books from the library, homeowners don't pay the fire department for its emergency response, and drivers don't pay to travel on the vast majority of roads. And transit fares aren't an ideal revenue source—they're regressive and unstable, dropping during economic downturns.

Most transit agencies rely on fare revenue out of necessity because direct government funding for public transit operations is limited. Despite mandates to serve all and the immense economic and environmental benefits they confer, transit agencies don't receive federal funding to operate service (pandemic relief was a rare exception). State funding for public transit operations is paltry compared to road funding, even in the most progressive states. California spends nearly 10 times more on roadways than on the state's transit agencies.

Why the bailout framing is unhelpful at best, harmful at worst.

Local and national reporting has made "bailout" synonymous with emergency funding for transit to avert COVID-induced fiscal crises—even though agencies haven't done anything reckless. Why does this language matter?

Because "bailout' confirms and aggravates public transit's ever-precarious and politicized funding status.

Transit agencies control their own fare policy, insulating farebox revenue from politics. But as COVID-19 and the Great Recession demonstrated, farebox revenue dips in response to economic disruptions, leading to budget gaps. Transit leaders are then forced to plead for additional funding when funding and goodwill are stretched thin, aggravating the impression that transit is perpetually stumbling through crises. This also means that transit agencies must spend their energy asking for more resources rather than operating service.

Economically resilient forms of funding could break transit from this vicious cycle. But often, they must be approved by the public: directly, like a local property tax approved through a referendum, or indirectly, via appointment from elected officials, like a dedicated grant in the state budget.

The public perception of transit agencies directly influences their ability to secure sustainable funding. If someone believes that transit agencies have been irresponsible in the past, they're less likely to support transit in the future.

What we need instead.

Transit is essential—millions of people and businesses rely on it, and it is the key to achieving environmental, economic, and equity goals. To help transit recover and grow ridership into the future, we need to invest in transit like the public service that it is at every level of government. We must provide transit with new revenue sources to allow agencies to run great service, tackle big societal problems, and plan for the future. To secure public support for additional funding for transit, how we talk about it matters.

Call it sustainable funding, call it a funding correction, call it investing in transit—just don't call it a "bailout."

Bob Powers is the general manager of Bay Area Rapid Transit.

Randy Clarke is the general manager of the Washington Metropolitan Area Transit Authority.

Dorval Carter is the president of the Chicago Transit Authority.

Stephanie Lotshaw is the executive director of TransitCenter, an independent foundation that works to secure a more just and sustainable future with abundant public transportation options.

The views expressed in this article are the writers' own.