Last week, The Frisc published a post about two competing visions to restore San Francisco’s Muni transit service, now running at two-thirds its pre-pandemic levels.
Even with a service boost coming in mid-August, the city’s transportation system won’t get close to the old normal. Nevertheless, most SF supervisors and transit advocates want full restoration to 2019 service, using federal emergency funds, before there’s any discussion about changes or altering routes. In contrast, the other camp — including the mayor, two supervisors, and officials at SFMTA, which oversees Muni — says that the restoration should reflect COVID-disrupted travel patterns (like working from home) to avoid pouring resources into sparsely used lines.
Almost everyone agrees that we need a faster, more efficient, more reliable Muni. This fight is over how much it needs to change, and how to pay for it — which brings us to those federal rescue funds, and why one supervisor, Dean Preston, pushed back against how we described them.
https://twitter.com/DeanPreston/status/1421207375915061252https://twitter.com/DeanPreston/status/1421375141196353536
In a tweet to highlight our story last week, we said that those funds were “running out.” (In his Twitter replies, Preston called that “spin” to “justify suspending lines.”)
Why did we characterize the $550 million remaining as a dwindling resource? It’s a fair question. SFMTA says the pandemic rescue funds, which began flowing in 2020, will reach $1.1 billion. (Not all have been disbursed.) About half of the total has been spent, and another $300 million will be gone by year’s end. The agency wants to reserve the remaining $250 million or so to cover expected losses in coming years.
For pizza or organic diapers or even single-family homes in San Francisco, $250 million sounds like a lot. To run Muni, it’s just enough for about two and a half months — and that’s with drastically reduced service. Operating costs averaged just under $100 million a month the past 12 months. In addition, service is going to expand in less than two weeks; costs will rise. All the while, everything gets more expensive: materials, maintenance, salaries, pension obligations, on and on. (The agency is looking to spend $1.4 billion in the next 12 months.)
So an important number for context is that monthly burn rate of $100 million or more. In his response, Preston mentioned SFMTA’s $120 million reserve. Again, that’s about a month of service. He also noted that Muni managed to cut costs during the past fiscal year and that its “balance sheet looks better today than before the pandemic” — but didn’t mention that those cuts came (without layoffs, which would have been horrible amid a pandemic) to get closer to a mandated balanced budget after revenues cratered.
The federal rescue bucks aren’t the only game in town, of course. Muni has other sources of revenue on its balance sheet. Let’s go through them one by one.
One … point … three … billion … dollars
Before the pandemic, $1.3 billion was how much SFMTA had budgeted to spend to operate and maintain daily service for fiscal year 2021, which ended this June. (This does not include spending on capital projects like the Central Subway construction.) All that money was supposed to come mainly from four sources:
Nearly half was supposed to come from rider fares and car-related fees; that didn’t happen. Those revenues, which accounted for 46 percent and 35 percent of the operating budget in the respective two years before COVID, instead fell off the pandemic cliff. Here’s a breakdown:
$19 million: That’s how much SFMTA collected in fares in fiscal 2021, instead of the projected $219 million. With the delta variant surge already deep-sixing the return of downtown workers and everyone under 18 about to ride free, fare collection isn’t likely to spike anytime soon.
$217 million: This is how much SFMTA collected in parking and traffic fees, fines, and taxes in fiscal 2021, instead of the projected $364 million.
$340 million: It’s how much cash SFMTA got from its annual transfer from the city’s general fund, instead of the projected $399 million.
$130 million: That’s how much cash SFMTA got from state funds and other sources in the “operating grants” category, instead of the projected $201 million.
All told, fiscal 2021 revenues are expected to come to $781 million; spending is now expected at $1.12 billion or slightly lower. The agency said it shaved $134 million from its fiscal 2021 spending without resorting to layoffs, in part with a hiring freeze and by capping overtime, according to SFMTA spokeswoman Erica Kato. But there was still a budget gap, which is why those federal rescue funds are moving out the door faster than you’d think.
Back in service?
SFMTA’s operating budget the next two years is slated to be $1.39 billion and $1.35 billion. In addition to the federal funds still to spend, the agency plans to tap $466 million from the city’s general fund, according to the fiscal 2022 budget the mayor just signed; $170 million in operating grants from the state; and whatever it can accrue from rider fares and parking/traffic fees.
Beyond the pandemic relief, a federal paradigm shift on funding could ease long-term pressures. But we’re seeing how hard it is to forge even a basic infrastructure package. Short of a near-miracle in Washington, the rescue Band-Aid will fall off.
SF State professor Jason Henderson, author of Street Fight: The Politics of Mobility in San Francisco, says there’s only so much our local officials can do as they defend their parochial interests. He blames the state of California for enabling the Bay Area’s Balkanized transit systems (an official count has them at 27), which are poorly coordinated and end up encouraging automobile use. “The state can and must be a partner, and it must cut through the regional fragmentation,” Henderson told The Frisc. “California is the single largest barrier to ‘transit first’ in San Francisco. And that is on neoliberal democrats as well as conservatives and misguided progressives alike. The state needs to be playing a huge role.”
Short of a near-miracle in Washington, the rescue Band-Aid will fall off.
Even before the pandemic’s existential crisis, our transit officials knew they couldn’t keep relying on fares and parking fees, or year-to-year allocations from the general fund. The city needs new modes of funding that don’t leave us lurching like a bus in stop-and-start traffic.
Dean Preston knows this too. (He wants to get rid of fares entirely; the mayor isn’t having it.) As we noted last week, even he is scrambling for ideas.
Whether you believe Muni should be free or not, whether it should pay for itself or be highly subsidized, whether it needs a lot more money or needs better management of what it already has, at least you should recognize that a one-time infusion of more than a billion dollars, under the current circumstances, is a rather finite resource. Unfortunately, it’ll be gone before you know it.
Alex Lash is editor in chief of The Frisc.
