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Speaker 1: Stand clear of the closing doors.

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Speaker 2: Please, When was the last time you took public transportation?

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Speaker 2: Maybe you're sitting on a local city bus right now,

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Speaker 2: or maybe even on an Amtrak train. Here in New

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Speaker 2: York City, commuting often means taking the subway. And if

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Speaker 2: there's one thing that unites New Yorkers, it's complaining about

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Speaker 2: the subway, dirty stations, train delays, weekend schedule changes, overcrowding, crime,

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Speaker 2: the list goes on, and remembering that you paid almost

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Speaker 2: three dollars for this ride, you're left to wonder where

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Speaker 2: that money is going. But even if you don't live

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Speaker 2: in New York, if you use public transportation and have

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Speaker 2: had complaints about it, it could very well get worse soon.

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Speaker 2: Billions of dollars in pandemic era emergency aid will dry

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Speaker 2: up by next year, and transit agencies all across the

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Speaker 2: US are bracing for impact that'll affect millions of Americans

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Speaker 2: who rely on public transportation every day to get to

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Speaker 2: work and run their daily errands. Bloomberg Municipal finance and

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Speaker 2: transportation reporter Skylar Woodhouse reports that the budget shortfalls faced

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Speaker 2: by some of the country's largest public transportation agencies could

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Speaker 2: put these already overburdened and underfunded services even closer to collapse.

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Speaker 2: I'm Scarlett Voo today on the big take, Mind the gap,

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Speaker 2: or better yet, stand clear of the closing door of

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Speaker 2: transit funding. Since the pandemic, public transportation agencies have seen

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Speaker 2: precipitous drops in ridership, and certainly that was a case

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Speaker 2: during lockdown, but even then it's been a long road

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Speaker 2: to recovery. And this matters because one major source of

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Speaker 2: revenue for these agencies comes from fares. How much did

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Speaker 2: ridership drop nationwide during the pandemic?

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Speaker 3: When the pandemic first rolled around these transitationcies across the country,

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Speaker 3: and especially in the major cities, they took a serious

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Speaker 3: drop in ridership.

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Speaker 1: New York subway ridership is down nearly ninety percent overall.

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Speaker 1: City data shows it's.

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Speaker 3: Down by less in low income neighborhoods like the Bronx

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Speaker 3: worl It only dropped by fifty five percent.

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Speaker 4: It's a ridership roller coaster for the Chicago Transit Authority.

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Speaker 4: As COVID nineteen fears go up, the number of passengers

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Speaker 4: takes a dip. That's an eighty seven percent dip on

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Speaker 4: the rails.

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Speaker 3: Each agency saw different levels of numbers, but if you

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Speaker 3: look at BART, for example, Bay Area Rapid Transit District

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Speaker 3: out in San Francisco, basically like an up to ninety

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Speaker 3: three percent drop in their ridership, and that is quite

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Speaker 3: mind bogging, Like if you think about it, if you

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Speaker 3: think about transit pre COVID and how you know you

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Speaker 3: could barely get on a train it would be completely packed,

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Speaker 3: to being face to face with complete strangers, to almost

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Speaker 3: the complete opposite of that, to where maybe nobody's on

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Speaker 3: the train, just a completely different energy. The ridership just

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Speaker 3: totally took a plummet as people started working from home.

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Speaker 2: How much has ridership returned compared with pre pandemic levels.

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Speaker 3: The's been coming back at different levels across different agencies.

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Speaker 3: If you look in New York with the MTA, I

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Speaker 3: think ridership has been hovering on weekdays between like seventy

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Speaker 3: to eighty percent. It's not exactly the pre COVID levels,

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Speaker 3: but they're inching pretty closely. So ridership is slowly coming

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Speaker 3: back as workers are starting to go back into the offices.

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Speaker 3: And there's a lot of projections out there that say,

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Speaker 3: you know, ridership still won't return to those pre COVID

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Speaker 3: levels for quite some time. Some agencies are seeing it

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Speaker 3: at like seventy to eighty percent, but some agencies are

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Speaker 3: still hovering maybe in the fifty percent level. It just

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Speaker 3: really depends on where you are, where you're located, and

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Speaker 3: what that returned office picture looks like for that city.

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Speaker 2: And it also depends on what day of the week.

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Speaker 2: Mondays and Fridays are ghost towns on public transit, whereas Tuesday, Wednesday, Thursday,

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Speaker 2: you're back to squeezing in and breathing in someone's bad

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Speaker 2: breath or under someone's armpit in my case. Apart from

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Speaker 2: fair revenue, where do the transit agencies typically get their

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Speaker 2: funding at the state, the local, and the fact levels.

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Speaker 3: The other key part for systems to receive funding is

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Speaker 3: through different levels of taxes, so sales tax, some sort

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Speaker 3: of local tax. It's those types of taxes that are

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Speaker 3: being directed towards transit agencies. But at the same time,

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Speaker 3: you know, they also still rely a little bit on

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Speaker 3: funding coming from like advertising.

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Speaker 2: So during the pandemic and in the immediate aftermath of

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Speaker 2: the pandemic, the federal government gave some money to transit agencies.

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Speaker 2: How much money did the federal government allocate and what

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Speaker 2: did transit agencies across the country use that money for.

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Speaker 3: When the pandemic first rolled around, Basically the federal government

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Speaker 3: had to jump in and offer a lifeline to these agencies.

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Speaker 3: Just to get some context here, Historically in the US,

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Speaker 3: transit agencies usually don't receive the operating funding from the

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Speaker 3: federal government. Now you might see the federal government step

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Speaker 3: been here and there for infrastructure related issues, so that

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Speaker 3: incodes words like the capital budget, but in terms of

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Speaker 3: the operating side, federal government usually isn't helping keeping these

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Speaker 3: agencies running their day to day operations. So that being said,

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Speaker 3: these transit agencies saw about seventy billion in aid and

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Speaker 3: that was dispersed, you know.

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Speaker 1: Across the country to various agencies.

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Speaker 2: So it's basically to keep them operating. I mean, it

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Speaker 2: was the most basic operating funding you could ask for.

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Speaker 3: Exactly yeah, literally just to make sure that you know that,

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Speaker 3: like they could still have trains running.

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Speaker 2: So now that the federal money is expiring or being

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Speaker 2: phased out, what do these transit agencies stand to lose

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Speaker 2: as results of budget shortfalls?

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Speaker 3: So it is actually a pretty scary picture especially if

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Speaker 3: you are one who lives in a major metro city

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Speaker 3: who is you know, dependent upon transit. I'm going to

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Speaker 3: use the Metro system in DC as an example. So

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Speaker 3: they're running up against the seven hundred and fifty million

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Speaker 3: dollars budget shortfall that could start as soon as next July.

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Speaker 1: So basically next they have.

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Speaker 3: To you know, grow it away to balance their budget

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Speaker 3: by April. But if that doesn't happen, then they're looking

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Speaker 3: at massive service cuts across their bus network, trade massive layoffs.

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Speaker 3: They're an agency of about twelve thousand people and that's

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Speaker 3: looking to probably cut that by around twenty percent.

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Speaker 5: General Manager Randy Clark says that the transit agency must

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Speaker 5: close the seven hundred and fifty million dollars budget gap

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Speaker 5: in the first half of twenty twenty four or face

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Speaker 5: some big changes. Some of those changes, all Metro train

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Speaker 5: stations would close at ten PM. Typically they're open until

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Speaker 5: midnight or later. Ten of Metro's ninety eight stations would

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Speaker 5: shut down completely. On metro bus, sixty seven of the

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Speaker 5: one hundred and thirty five lines would be eliminated, and

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Speaker 5: thousands of Metro employees would lose their jobs.

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Speaker 3: So a big part of it is that these systems

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Speaker 3: are running up against having to do layoffs, service cuts,

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Speaker 3: and then it could also impact safety and security. I

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Speaker 3: think one thing that's been in the news a lot

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Speaker 3: is how cities are kind of combating these perceptions that

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Speaker 3: crime missrizing. What do the crime levels look like? So

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Speaker 3: a lot of systems have had to increase their security

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Speaker 3: presence a little bit. So that could also be off

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Speaker 3: the table, depending on if they can or cannot find

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Speaker 3: a way to balance their operating budget.

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Speaker 2: What are experts projecting when it comes to the federal

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Speaker 2: money expiring and creating this vicious cycle that deepens budget

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Speaker 2: woes for transit agencies.

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Speaker 3: Transit in the US has not really been the top

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Speaker 3: priority in terms of funding, and this is raising that

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Speaker 3: attention to like, look, if we are going to prioritize

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Speaker 3: transit and the US and as we do, you know,

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Speaker 3: for example, have these climate goals, Transit is one of

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Speaker 3: the cleaner ways to move around. So it's really kind

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Speaker 3: of waking people up to like, Okay, how can we

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Speaker 3: establish some sort of recurring revenues for these agencies that's

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Speaker 3: not so tied to fares and what are the other

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Speaker 3: options that can be done to keep these systems afloat,

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Speaker 3: and some people have said that we should treat transit

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Speaker 3: in the US as like a social service.

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Speaker 2: After the break, a look at some of the biggest

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Speaker 2: public transit systems facing budget shortfalls. So when it comes

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Speaker 2: to the MTA, that's the nation's largest mass transit system overall,

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Speaker 2: it was already heavily indebted before the pandemic. What does

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Speaker 2: its shortfall look like right now as federal age dries up.

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Speaker 3: So the Metropolitan Transportation Agency in New York has actually

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Speaker 3: become like the kind of example that these other agencies

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Speaker 3: are now trying to model themselves after. So basically, right now,

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Speaker 3: what the MTA has planned is that they will receive

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Speaker 3: funding from a payroll tax on businesses in New York

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Speaker 3: City that will help fund the agency, and that's supposed

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Speaker 3: to go through about twenty twenty seven. But the governor

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Speaker 3: also is hoping that they can start pulling casino revenue

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Speaker 3: and use that revenue to go towards the MTA.

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Speaker 6: It's no secret you know this. The agency is in

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Speaker 6: a deep fiscal canyon, and the governor's proposed budget now

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Speaker 6: provides hundreds of millions of dollars to keep the buses

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Speaker 6: rolling and the trains running. Governor Jokell proposed a small

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Speaker 6: increase in what's called the payroll mobility tax that's paid

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Speaker 6: by businesses, as well as a dedicated share of future

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Speaker 6: casino revenue once Downstate Casino one.

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Speaker 3: Now the casino is still a work in progress, so

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Speaker 3: it is kind of up in the air, but it's

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Speaker 3: just another short term fix.

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Speaker 2: The fact of the matter is that New York's MTA

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Speaker 2: is in this uncomfortable position. Its funding is set by Albany,

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Speaker 2: even though mt operates in the city and the state

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Speaker 2: has underfunded the MTA for decades. Can you tell us

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Speaker 2: a little bit about why the MTA has been set

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Speaker 2: up this way and how it has did a disservice

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Speaker 2: to New York City residents as a result.

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Speaker 3: I think a lot of people when they have frustrations

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Speaker 3: with the MTA, they're like, oh, the mayor should have

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Speaker 3: been doing better with this.

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Speaker 1: The head of the NTI reports to the governor, not

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Speaker 1: the mayor.

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Speaker 2: You mentioned Washington, the Metro and how the numbers they

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Speaker 2: are really looking very dire. Why is the problem in

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Speaker 2: DC particularly acute?

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Speaker 1: Though?

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Speaker 3: DC's interesting because it's still a major city, but they're

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Speaker 3: struggling because I mean, you think of Washington, DC, all

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Speaker 3: you can think about is the federal government, and like

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Speaker 3: a lot of those federal government employees haven't really returned

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Speaker 3: back to the offices and the same way that you

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Speaker 3: might see in corporate America. They actually just relocated to

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Speaker 3: Washington from New York. And I have kind of noticed

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Speaker 3: the differences in terms of what kind of the downtowns

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Speaker 3: feel like during the work week, in terms of like

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Speaker 3: going into the office. So the transit operators here are

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Speaker 3: trying to figure out, Okay, people.

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Speaker 1: Aren't referring to the office, what are we going to do?

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Speaker 3: They're going to have to even start making cutbacks, and

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Speaker 3: they're not even on the same scale as like an MTA,

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Speaker 3: but they're still operating in a major city that still

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Speaker 3: has to move people around.

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Speaker 2: You mentioned work from home and how that seems to

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Speaker 2: be more common in a place like Washington than in

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Speaker 2: New York. How about California and the Bay Area in particular,

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Speaker 2: which had suffered some really horrible traffic in Silicon Valley

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Speaker 2: to the city. We know that both the bart the

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Speaker 2: Bay Area of Rapid Transit District and the MUNI, the

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Speaker 2: San Francisco municipal railway are anticipating financial troubles. How much

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Speaker 2: of that is tied to people staying home and not

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Speaker 2: going into the office.

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Speaker 3: In the Bay Area, we think of big tech, and

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Speaker 3: you know a lot of the tech companies they weren't

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Speaker 3: necessarily rushing back into the office.

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Speaker 1: I think a lot of people in the Bay Area

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Speaker 1: have moved to the surrounding suburbs a little bit.

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Speaker 3: Bloomberg has done a really nice job and tracking how

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Speaker 3: people also are moving out of the Bay Area to

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Speaker 3: Texas or even Florida.

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Speaker 5: Really twelve months people leaving the Bay Area and exodus,

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Speaker 5: if you will, during this pandemic.

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Speaker 1: But where is everyone going? Is it Austin, is at Renos,

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Speaker 1: at Las Vegas?

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Speaker 3: And at the same time, I think a lot of

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Speaker 3: people also were buying cars and are driving places.

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Speaker 1: So how is.

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Speaker 2: The California state and regional government stepping in to help

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Speaker 2: lessen the budget shortfall faced by Bart and Muni.

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Speaker 1: California Governor Gavin Newsom and the state legislator.

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Speaker 3: They've put together some short term funding that will be

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Speaker 3: dispersed throughout the entire state. And I think that's one

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Speaker 3: thing that's really interesting when you compare California in New York.

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Speaker 3: So in New York, MTA is pretty much like the

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Speaker 3: main transit operator, and in California you have so many

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Speaker 3: different systems, so it's not just kind of like the

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Speaker 3: governor can just be like, oh, Bart, you're going to

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Speaker 3: get this amount of money.

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Speaker 1: They have to really divvy it up.

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Speaker 3: Across all the various networks that are all throughout the state,

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Speaker 3: from northern California to southern California, at.

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Speaker 1: Least in the Bay Area.

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Speaker 3: They're looking to try and put some sort of long

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Speaker 3: term funding plan on the ballot in an upcoming election

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Speaker 3: in the next couple of years, so that way they

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Speaker 3: can get voters input to try and then have some

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Speaker 3: sort of long term funding.

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Speaker 2: When we return, will state and federal government step in

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Speaker 2: to bridge the funding gaps facing public transit agencies. In

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Speaker 2: the past, when I've ended up at the thirtieth Street

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Speaker 2: station a track station, it's probably because I took the

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Speaker 2: late train back from Washington and I slept through.

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Speaker 7: The Delaware stop literally not figured.

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Speaker 3: I only did it about four times.

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Speaker 2: President Biden, who we know, is a noted train travel enthusiast.

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Speaker 2: He talks a lot about taking the train to Wilmington

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Speaker 2: when he was a senator. He recently announced new federal

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Speaker 2: funding for rail projects makes sense across the country. How

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Speaker 2: much money are we talking about here, Skyler.

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Speaker 3: President Biden recently announced about eight point two billion for

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Speaker 3: rail projects across the country. Now, this is everything from

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Speaker 3: trying to kickstart high speed rail from Las Vegas and

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Speaker 3: southern California to improving rail operations between Raleigh, North Carolina

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Speaker 3: and Regimond, Virginia speed Rail.

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Speaker 7: The Biden administration is announcing eight point two billion dollars

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Speaker 7: for projects on both coasts.

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Speaker 2: Folks. We've been talking about this project for decades.

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Speaker 3: Now we're really getting it done.

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Speaker 7: Three billion goes to bright Line West, linking the Los

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Speaker 7: Angeles area to Las Vegas in about two hours. The

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Speaker 7: two hundred and eighteen mile line will run along Interstate fifteen.

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Speaker 3: He announced this funding and hopes that, you know, they

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Speaker 3: can try and start moving some of these rail projects forward.

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Speaker 1: So what a lot of.

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Speaker 3: President Biden has been announcing funding for infrastructure projects, and

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Speaker 3: that money is going to help finance transit upgrades, repairs

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Speaker 3: for signals, tracks, all of those things, because like the

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Speaker 3: transit systems and the country, they need a lot of work,

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Speaker 3: So a lot of that funding is going towards the

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Speaker 3: capital side and not necessarily the operating side. Now, there

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Speaker 3: have been some conversations about do we allow agencies to

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Speaker 3: pull capital to the operating Recently, the head of the

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Speaker 3: Metro system in DC was like, I would love to

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Speaker 3: see a conversation where we have the federal government start

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Speaker 3: helping out on the operating side and not just for

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Speaker 3: those capital infrastructure needs.

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Speaker 2: When you look at our transit systems versus how other

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Speaker 2: cities have planned theirs out and how they've really maintained them,

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Speaker 2: it's pretty striking the differences. Then part of it is

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Speaker 2: funding as well. New York City is on the brink

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Speaker 2: of implementing the nation's first congestion pricing scheme. We know

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Speaker 2: that London, we know that Singapore, we know that other

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Speaker 2: cities like Milan have used this. How will this program

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Speaker 2: work to fund public transit in the city. What's the

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Speaker 2: connection here?

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Speaker 3: So this would be a first for a US city,

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Speaker 3: which would be a pretty big deal. And New York

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Speaker 3: City has been trying to get congestion pricing going for

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Speaker 3: decades now. It's just kind of run into a lot

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Speaker 3: of political hurdles. But Basically, for drivers entering Manhattan below

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Speaker 3: sixtieth Street, you would be charged charge a fee to

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Speaker 3: drive around the Central Business District.

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Speaker 8: Congestion pricing has been a hot button issue ever since

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Speaker 8: it was proposed by the Bloomberg administration years ago. Today,

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Speaker 8: an advisory board proposed a fifteen dollars a day fee

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Speaker 8: for cars entering below sixtieth Street in Lower Manhattan. Trucks

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Speaker 8: would have to pay even more.

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Speaker 1: The billions of dollars raised through congestion pricing would go

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Speaker 1: to the MTA.

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Speaker 3: I think if you've been to New York, you know

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Speaker 3: how bad the traffic is. They're trying to reduce the traffic.

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Speaker 3: It's supposed to help the environment with less cars from

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Speaker 3: the road, and the money from tolling will go directly

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Speaker 3: towards the MTA and capital upgrades.

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Speaker 2: So Skyler. When it comes to congestion pricing, which of

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Speaker 2: course is still controversial, they're plenty people who don't like it.

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Speaker 2: What kind of capital projects could the revenue from congestion

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Speaker 2: pricing in New York City fund?

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Speaker 3: New York City, they're trying to build the Interborrow Express,

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Speaker 3: which would be a rail to.

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Speaker 1: Connect Queens and Brooklyn.

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Speaker 3: So you know, congestion pricing could help finance that project

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Speaker 3: and make crossing between the two burrows by.

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Speaker 1: Subway a lot easier.

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Speaker 3: It could also help finance something as small as making

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Speaker 3: sure that tracks are up to date in signals and

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Speaker 3: some of the new technologies that trads need nowadays, and

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Speaker 3: same for buses as well.

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Speaker 2: So it's mainly to address operational issues, exactly the kind

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Speaker 2: of stuff that the eight point two billion dollars that

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Speaker 2: President Biden announced probably won't.

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Speaker 3: So the congestion pricing money you will be used for

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Speaker 3: capital infrastructure related projects.

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Speaker 2: So New York City, if this congestion pricing scheme goes through,

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Speaker 2: would be the first city in the US to implement this.

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Speaker 2: Where else in the US is congestion pricing being considered.

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Speaker 3: There's been some kind of loose conversations that some cities

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Speaker 3: haven't really like locked it in. Chicago kind of hinted

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Speaker 3: at it a little bit. Los Angeles has also hinted

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Speaker 3: at it a little bit. I mean, Los Angeles we

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Speaker 3: all know is like car city, so they're really trying

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Speaker 3: to find ways to cut down on their congestion.

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Speaker 2: What will you be looking for as you continue to

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Speaker 2: report on the state of these public transit agencies across

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Speaker 2: the US. What will you be listening for? What will

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Speaker 2: you be watching out for?

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Speaker 3: I'll be watching out for. What's the conversation like long term?

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Speaker 3: I think transit often sees short term solutions and as

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Speaker 3: short term patches. So I'm curious what's happening long term here?

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Speaker 3: And though you know, there's a lot of conversations to

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Speaker 3: how we're going to keep these systems going, it's also

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Speaker 3: very short term. Still no one has really found the

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Speaker 3: right answer for like what can be done long term?

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Speaker 3: And when I say long term, I'm talking let's jump

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Speaker 3: forward to twenty fifty. What does transit look like then?

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Speaker 3: How is it being financed? Who's paying for it?

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Speaker 1: You know?

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Speaker 3: So I'm curious, like what do those conversations kind of

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Speaker 3: look like? And really will we see something new from

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Speaker 3: the federal government in terms of some sort of financing

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Speaker 3: to help keep these systems moving forward.

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Speaker 1: On the operational side, a lot of.

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Speaker 2: These agencies have no choice but to focus on the

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Speaker 2: short term because they're fighting it what feels like a

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Speaker 2: daily battle. Are fare increases a short term solution? How

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Speaker 2: much support do fair increases actually give these transit agencies?

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Speaker 3: They do help, But if you still don't have a

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Speaker 3: ton of writers and you're raising fares, like, yes, it's

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Speaker 3: going to help you, and yes it's going to give

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Speaker 3: you some extra cash.

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Speaker 1: But they still will really need to see a.

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Speaker 3: Huge population of writers come back with those fair hikes

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Speaker 3: for there to be like a real difference. But the

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Speaker 3: fair hikes, that is something you are hearing that agencies

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Speaker 3: are having to do on Metro and DC, they're going

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Speaker 3: to have to raise fares. People feel strongly that public

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Speaker 3: transit it's a public service and it is something that

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Speaker 3: shouldn't cost money to use. To use the public schools

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Speaker 3: system for example, Okay, like yes, you do pay taxes

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Speaker 3: towards public schools, but in that same way, you could

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Speaker 3: be paying those types of taxes towards your transit agency.

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Speaker 3: So that way, like you don't have to pay to

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Speaker 3: go to your local public school, that you can just

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Speaker 3: enrolling go And some people say that, you know, that's

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Speaker 3: how it should be for transit.

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Speaker 2: Skyler Woodhouse, thank you so much for joining us.

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Speaker 1: Thank you.

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Speaker 2: Skyler Woodhouse is a reporter at Bloomberg News. She covers,

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Speaker 2: among other things, the public transit agencies. Thanks for listening

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Speaker 2: to us. Here at The Big Take. It's a daily

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Speaker 2: podcast from Bloomberg and iHeartRadio, and for more shows from iHeartRadio,

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Speaker 2: visit the iHeartRadio app, Apple Podcasts, Bloomberg CarPlay, or wherever

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Speaker 2: you listen. And of course we'd love to hear from you.

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Speaker 2: Email us questions or comments to Big Take at Bloomberg

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Speaker 2: dot net. This episode was produced by Sam Cabauer, with

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Speaker 2: production assistants from Michael Falero, Federica Romaniello, and Moe Barrow.

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Speaker 2: Hilda Garcia is our engineer. Our original music was composed

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Speaker 2: by Leo Sidrin. I'm Scarlet Fu. We'll be back tomorrow

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Speaker 2: with another Big Take