Big City Transit Agencies Face Budget Shortfalls

As rainy day funds and federal aid dwindle, transit agencies formerly reliant on farebox revenue are exploring new ways to fund their operations.

2 minute read

June 29, 2022, 6:00 AM PDT

By Diana Ionescu @aworkoffiction

Bus Service

A Southeastern Pennsylvania Transportation Authority (SEPTA) bus in Philadelphia. | Tupungato / Shutterstock

Transit agencies in some of the biggest U.S. cities “are facing a fiscal cliff,” according to one in a series of Governing articles that outline the prospects of transit agencies around the country. 

As Jake Blumgart writes, “It is worth noting that the vast majority of American transit systems do not rely on fares for much of their budget. Their ridership is overwhelmingly comprised of lower-income passengers, who have not had the luxury of remote work during the pandemic.” But for agencies in big cities where remote work made a big impact on ridership and revenue, the drastic change in how people use transit could mean an existential crisis.

The article describes an analysis by TransitCenter of transit systems in New York, Philadelphia, and Chicago. New York’s Metropolitan Transportation Authority (MTA) doesn’t face a budget shortfall until 2025, in part thanks to its “expansive” ability to borrow money. But to maintain the system long-term, the agency needs new sources of funding, such as the city’s congestion pricing program. Philadelphia’s Southeastern Pennsylvania Transportation Authority (SEPTA), meanwhile, is cushioned by a rainy day fund that the state requires transit agencies to maintain. In Chicago, the Regional Transportation Authority (RTA) is relying on the generous amount of federal aid it received, as well as a local sales tax on online sales that contributes to the agency’s revenue.

All three agencies, however, expect to face budget shortfalls by the end of 2025.

Monday, June 27, 2022 in Governing

Close-up of 'Red Line Subway Entry' sign with Braille below and train logo above text in Chicago, Illinois.

Chicago Red Line Extension Could Transform the South Side

The city’s transit agency is undertaking its biggest expansion ever to finally bring rail to the South Side.

November 24, 2023 - The Architect's Newspaper

stack of books

Planetizen’s Top Planning Books of 2023

The world is changing, and planning with it.

November 24, 2023 - Planetizen Team

Row of brick three-story townhomes in Britih Columbia.

More Affordable Housing for People, Less for Cars

Most jurisdictions have off-street parking requirements that increase motorists’ convenience but reduce housing affordability. It’s time to reform these policies for the sake of efficiency and fairness.

November 20, 2023 - Todd Litman

Close-up of driver's side of silver truck with cloud of dirty emissions from tailpipe.

FHWA Issues Emissions Tracking Rule

The agency will require states to monitor transportation emissions and create plans to address air pollution.

46 minutes ago - Route Fifty

Close-up of bus driver from behind with only hand visible on steering wheel.

FTA Proposes Measures to Prevent Transit Operator Fatigue

Public transit is the only type of transportation not already subject to ‘hours of service’ and fatigue risk management regulations.

2 hours ago - Safety & Health

Entrance sign for Big Bend National Park, West Texas.

West Texas Growth Prompts Water Supply Concerns

Small desert communities are looking for ways to conserve water as their tourist and resident populations grow.

3 hours ago - The Daily Yonder

Assistant/Associate Professor in Indigenous Planning

University of New Mexico - School of Architecture & Planning

Principal Planner

Placer County

Coastal Program Analyst III

San Francisco Bay Conservation and Development Commission (BCDC)

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.