Newsom Proposes Cutting Transit Funding as Systems Beg for Cash

(Bloomberg) -- California Governor Gavin Newsom on Friday rejected calls to further subsidize public-transit operators, while slashing funding for new rail projects as part of his revised 2023-24 budget proposal.

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Facing a projected $32 billion budget deficit, Newsom is looking for ways to cut spending, including proposing a $2.2 billion reduction on transit infrastructure and no new funding for local public-transit providers.

The California Transit Association, a 220-member advocacy group, has requested $5.15 billion over the next five fiscal years from the state to help support agencies’ operating budgets.

“I don’t want to overpromise that were in a position to offset ongoing subsidies to transit agencies all across the state of California,” Newsom said during a briefing in Sacramento.

Across the US, transit providers are struggling to recover from the pandemic as ridership remains low due to work from home policies. In San Francisco, ridership on the Bay Area rapid transit system is about 40% below pre-pandemic levels, while the Los Angeles metro system is at about 70% of 2019 levels.

Read More: Biggest US Transit Systems Face a $6.6 Billion Funding Shortfall

“Both state and federal, post-pandemic ridership trends have resulted in significant operating challenges for many of the state’s transit agencies, particularly as federal relief dollars begin to run out,” according to budget documents released on Friday. “The administration welcomes discussion with the legislature on potential near- and long-term solutions to support the viability of transit across the state.”

Several transit systems in the Golden State, such as the Bay Area Rapid Transit District, San Francisco Municipal Transportation Agency, which operates buses and cable cars in the city, and the Los Angeles Metropolitan Transportation Authority, are forecasting funding shortfalls in the coming years.

“If we are making it so difficult for people to commute — people of all income levels — we really risk losing our workforce to other regions and states,” Emily Loper, vice president of public policy at the Bay Area Council said by phone. “That would have really dramatic impacts on the Bay Area economy which helps drive the state economy.”

By contrast in New York, Governor Kathy Hochul gave the Metropolitan Transportation Authority a major bailout with a last-minute deal in April to raise the payroll tax on New York City’s largest businesses to bring in about $1.1 billion for the agency.

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