As we think about the worst case scenario over the coming year, it is not unrealistic to consider three key factors:
1. Tax receipts to federal, state and local government will be substantially lower. Higher unemployment means lower income taxes. Extended stay at home orders and closed stores/restaurants mean lower sales tax receipts. Less driving to work due to remote work opportunities means lower gas tax receipts. At the federal, state and local government level that means double digit declines in revenues.
2. With approximately 65% of transit customers commuting to/from work — and with high unemployment, remote work and many entertainment destinations closed — farebox receipts will continue to perform substantially lower than current expectations.
3. As social distancing requirements limit capacity on trains/buses/ferries, higher levels of service and operating costs will be required — all while bringing in lower levels of customer based revenues.
If each of those scenarios wind up true for much of the next year, the implications on transit systems are precarious at best. The MTA in NYC announced that they are losing $200M a week. Other communities are experiencing similarly harrowing numbers.
What can a transit system do today to mitigate such substantial risks a year from now if the above scenario were to be true?
1. Ensure service levels match reasonable social distancing requirements. Running substantial levels of service at pennies on the dollar in cost recovery is simply not sustainable — hoping that higher levels of government will support the shortfall when they will likely lack the revenues to provide support. Begin smart service today.
2. Use CARES Act funding today as though it must last your agency for three years — because it might be necessary in a worst case scenario.
3. Demonstrate community value in ways that go far beyond ridership. Innovative transit agencies like CapMetro in Austin are delivering groceries to people over age 55. Other agencies are demonstrating similar value far beyond the traditional definition of ridership. If/when an agency needs to turn to the community for sustainable sources of local revenue, demonstrating measurable value far beyond traditional transit will be key.