By Chris McCahill
Last month, SSTI staff joined the mayors of Milwaukee and two nearby communities for a meeting aimed at preventing a pending crisis for the local transit agency. Like many transit systems across the country, Milwaukee’s has exhausted its remaining federal COVID relief funds and was facing a 15% service cut and a 50% fare increase. Thanks to strong advocacy, the county has since proposed budget changes that would add $4.8 million to preserve service.
Milwaukee’s story is not unique. Federal relief funds that kept buses running through the pandemic are drying up, forcing agencies to find stop-gap funding solutions. Milwaukee’s temporary fix pulls money from deferred maintenance on county buildings. In a similar high-profile move, Pennsylvania’s governor redirected $153 million in federal highway funds to support transit projects in Philadelphia, which helped offset operational costs and avoid service cuts at SEPTA.
These short-term measures can buy valuable time while long-term solutions take shape. Soon after Pennsylvania’s emergency transfer, PennDOT allowed SEPTA to use $394 million in state funds—typically reserved for capital investments—to cover operations for two years. Meanwhile, a coalition of advocates is pushing for a more permanent fix by applying modest fees on car rentals, leases, and ride-hailing services. Their goal is to prevent future cuts and expand service by 10% in smaller cities.
There are reasons for optimism. In 2024, 51 of 61 local ballot measures to fund transit passed across the country. States are also stepping up. Lawmakers in Illinois approved new revenue measures that will raise $1.5 billion for transit, including a share of existing gas taxes, a 0.25% sales tax increase, and interest earned from a highway fund usually reserved for road projects. The Massachusetts DOT approved $850 million for transit upgrades, which come from the state’s “millionaire tax.”
The key to long-term stability for transit agencies, however, comes down to strong and growing ridership. That means avoiding major service cuts, even in the face of fiscal crisis. When service deteriorates, explains UCLA Professor Michael Manville, even the most cash-strapped riders can be forced into car ownership. “Once you buy the car,” he explains, “you’re not coming back to the train or bus, even if service is restored.”
The key to growing ridership and revenues, according to Bloomberg reporters, is fast and frequent service. This can sometimes be accomplished without new revenues, simply by reorienting transit systems toward a ridership model. Following system redesigns in Akron, Ohio; Monterey, California; and Suffolk County, New York, transit agencies saw ridership increase by at least 40%. This could promote a “virtuous cycle,” according to researchers for the Urban Institute. Their 2023 report, Surmounting the Fiscal Cliff, explains:
As transit becomes more popular, higher ridership can mean increased fare revenues, which can help fund agency operating costs. But even without much more funding from fares, higher ridership could encourage popular and political consensus in favor of funding this essential public service. More riders mean more voters who believe that transit is a key element of a functional, desirable society.
Photo credit: Ewan Streit on Unsplash. License.