Transit group calls for $39.3 billion subsidy

Study, surveys predict slow ridership recovery

The longer the pandemic lingers and the economy lags, the steeper and more expensive the hill that public transit has to climb to get back to normal.

But if the federal government doesn’t provide larger subsidies to maintain service levels and continue construction projects, the ripple effect will cause the economy to recover at an even slower pace.

That’s the conclusion of a consultant’s study and two surveys released last week by the American Public Transit Association. The association said the industry will need $39.3 billion more in stimulus money to maintain service and construction through 2023.

Without such aid, the study said, the industry will have to cut construction and service, reducing direct construction jobs and making it harder for people who rely on transit to get to work.

That approach — that transit

has a far-reaching impact that will substantially hurt the economy if it can’t buy new vehicles and build new projects — was used last year by transit agencies in Philadelphia and New York, among others, to lobby for higher subsidies.

“Clearly, the path to recovery from the pandemic and the economic slowdown has been considerably longer than anyone expected,” said Paul Skoutelas, association president and CEO. “We’re at a really critical point.”

The pandemic has caused a double whammy for the transit industry, with sharp reductions in ridership and increased costs for sanitizing vehicles and facilities.

Locally, Port Authority lost $56 million in fares last year as ridership initially dropped about 80% and remains more than 60% below pre-pandemic levels. It has returned to near-normal service, but buses and light rail vehicles have passenger limits to reduce the spread of the virus.

The agency has $141.75 million in stimulus money available to reimburse losses and expenses related to the pandemic. It has received about $36 million in reimbursements and has more bills pending.

Under the Trump administration, Congress approved $25 billion in stimulus funds for transit last spring and another $14 billion in December. President Joe Biden has proposed an additional $20 billion in his recovery plan, but a study for APTA by consultant EBP US says that won’t be enough to get through 2023, when ridership could return to normal.

The study said that based on ridership and recovery estimates, transit will need $39.3 billion over the next three years — an additional $11.2 billion this year, $15.1 billion in 2022 and $13 billion in 2023. That money would help the agencies continue service and billions of dollars worth of construction projects.

An APTA survey of 130 transit agencies showed 65% already have reduced service and 22% have laid off staff, but without more aid, 38% would make additional service cuts and 22% would lay off more staff.

“They have to consider very draconian cuts without more help,” said Mr. Skoutelas, a former CEO at Port Authority. “This would result in lost jobs to the transit workers, to those who use transit to get to work, and to transit-related industries that manufacturer buses and are involved in construction.”

In the second survey, 76% of businesses said their transit-related work had been reduced during the pandemic and that the average reduction was 40%. Last year, 32% of transit-related businesses said they laid off workers and 38% said they likely would have more layoffs without an increase in stimulus funds.

“That’s the ripple effect of not funding transit — these other industries lose business and workers,” Mr. Skoutelas said. “That would just make the economic recovery take that much longer.”

Port Authority CEO Katharine Eagan Kelleman sounded the same theme Friday at the authority board’s monthly meeting, at which she repeated the agency’s goal of continuing as much service as possible.

“We are what connects this community so we can keep the economy growing,” she said, adding that a strong transit system is necessary to “undergird” and support economic recovery.

In the Philadelphia area, Southeastern Pennsylvania Transportation Authority has said its $1.5 billion operating budget and $640 million capital budget make it one of the largest economic generators in the state.

The Metropolitan Transportation Authority in New York City released a report in June saying that its operating budget of $17 billion and capital budget of $55 billion were larger than the entire state budgets in nine states and generate thousands of jobs in related industries.

Current projections have transit ridership and the economy returning to pre-pandemic levels by the end of 2023, but Mr. Skoutelas said that’s far from certain. It remains unclear how many employers will be comfortable having people continue working from home after the pandemic.

“We don’t know how long the effects of the pandemic will last,” he said. “We’re not anywhere near a fully open society right now.

“I’d like to anticipate the economy will ramp up by then, but we really have no way of knowing at this point.”