By now everyone who reads a newspaper or listens to a radio knows that major transit agencies across the nation are heading toward a “fiscal cliff”

Large Bay Area public transit operators like BART, SFMTA, SCVTA, AC Transit, Caltrain, SamTrans and Golden Gate Transit have seen their riderships and fare revenues drop precipitously while operating costs increase and tax revenue sources dry up.

If a private business operating in a competitive environment were faced with this situation it would be required to find ways of raising revenues and/or cutting costs, or facing the prospect of having to close its doors. With a public agency, things are different. When a large bureaucracy is faced with the same problem it seldom looks very hard if at all for cost-cutting opportunities. Instead, there is a strong tendency on the part of most agencies, backed by labor interests, business groups, and other advocates, to sit and bewail the situation while demanding more tax money from other levels of government.

In any event, transit has fallen on hard times and the question is what to do about it.

Need for Better and More Prudent Cost Control:  Transit provides an important public service and for this reason needs and deserves taxpayer support. But that’s not the whole story. There is also a need for the transit agencies themselves to look for opportunities to increase their farebox revenues and reduce their administrative and operating costs. As things stand, transit agencies and their Boards of Directors focus too much on “new or additional revenue sources” and not enough on improving existing service, cost-effectiveness, controlling operating and administrative expenses and sound management. But what used to be tolerated may no longer be. Given the State of California’s $31.5 billion deficit and the even greater national fiscal woe, the hoped for State and federal bailouts may not materialize. If so agencies that fail to streamline their operations may be putting themselves at substantial risk.

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Need for Strings:  If the Governor of California decides to go ahead with plans just announced by the State Legislature to provide transit operating funds to help Bay Area transit agencies get through the present crisis, the allocation should have strings attached. The entities doing the allocating also have a responsibility; namely, to help ensure that their allocations are spent prudently for the intended purposes. Or, as is being advocated by transit experts at SaveMuni in San Francisco, the funds could be allocated only if each receiving agency agreed to reduce its operating/administrative costs by an equal amount. In the past everyone has paid too little attention to efficiency, management, and how and how well the money is spent. This must end.

Conclusion:  It appears that some agencies have taken steps to address these problems. But the fact remains that most of them face the dire prospect of running out of operating capital in 2025 or 2026. The only agency we know of that has kept its revenues and operating costs in balance is Golden Gate Transit. Opportunities to tighten up at BART, Caltrain, SCVTA, SamTrans, SFMTA, and AC Transit abound. Examples of past waste as well as some of the steps that could be taken to improve things have been outlined in previous BATWG articles.

Anticipating difficulties in securing an adequate amount of State and federal funding, the local powers-that-be are quietly preparing to place another major transit tax measure on a Bay Area regional ballot. To gain voter approval such a measure would require a 2/3 “yes” vote and if the measure failed things would quickly go downhill. So what are the chances of such a measure winning voter approval? Answer, it depends. The best way of regaining the trust and public support needed to get another regional tax measure passed would be for the agencies to begin right now to demonstrate a new commitment to excellence and transparency.