Suburban backlash threatens country’s biggest transit systems
Major systems in New York, Washington, Philadelphia and beyond are facing deep financial struggles in the wake of the pandemic.
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The nation’s largest mass transit systems are edging closer to solving their post-pandemic budget crises, but one thing is standing in their way: the suburbs.
After several years of incomplete recovery from a massive ridership drop, federal relief money is running out for systems in New York, Washington, Philadelphia and other major cities. That means long-looming fiscal cliffs are at hand, prompting talk of massive fare hikes, devastating service cuts and new taxes or fees.
But historic tensions between urban needs and suburban wants are colliding, as fixes for transit systems depend on approval from elected officials — and their voters — who live outside the central business districts most transportation systems were designed to serve.
The head of New York’s Metropolitan Transportation Authority, Janno Lieber, has fumed over suburban politicians in New York and New Jersey standing up for drivers while doing little to help the vast majority of commuters who use the MTA to get to work.
“Although the politicians seem to speak to very old school models of ‘the suburbanites hate the city’ and they don’t like mass transit commuting, the numbers just don’t bear that out,” Lieber said.
The tensions percolated even before the pandemic and are rooted in a basic fact: No public mass transit system in the country generates enough revenue to support itself. They all need a mix of subsidies to keep fares affordable, especially for the low-income riders that depend on the systems the most.
Perhaps the most high stakes and at times visceral showdown is in New York where plans to fund the MTA keep hitting a series of suburban speed bumps.
Last year, state lawmakers and Democratic Gov. Kathy Hochul helped the MTA avoid a fiscal cliff that would have hit $3 billion next year by increasing the payroll tax on large businesses.
Originally, Hochul had pitched a broader tax for all the areas served by the agency, including outside New York City, but it faced steep opposition from suburban lawmakers and was scaled back to just hit businesses within city limits. The change underscored heightened anxiety ahead of the 2024 election, after Republicans picked up suburban House seats in the midterms.
Now, the agency is in the middle of another showdown with some of the same areas. The MTA’s long-term infrastructure spending is staked on billions of dollars from a congestion pricing plan for drivers coming into Manhattan. Starting in late June, new tolls of $15 for cars and more for big trucks are supposed to reduce traffic and improve air quality in parts of Manhattan and fund MTA construction projects.
But before that can happen, the agency has to fight a series of federal lawsuits filed by officials and residents in the city’s outer boroughs, including Staten Island’s borough president, a town on Long Island, and New Jersey Gov. Phil Murphy.
Rep. Josh Gottheimer, a New Jersey Democrat, is perhaps the quintessential suburban politician — one of the towns in his district is called Fair Lawn. He has waged a years-long battle against congestion pricing and recently joined with a bipartisan group of suburban and outer borough lawmakers in New Jersey and New York to call for increased federal oversight of the MTA.
“Let’s speak up for the tri-state residents who will have fewer job opportunities and pay higher prices because of the congestion tax,” Gottheimer said, during a recent speech in front of the MTA headquarters.
Even before the pandemic, transit agencies’ revenue — from fares, tolls and taxes some can impose, along with things like advertising on buses and subways — generated far less than half their budgets. The rest came from local, state and federal subsidies.
Transit systems don’t lose money on every ride, but, ironically, they lose more money the further out into the suburbs they go. That’s because the high frequency, high volume routes nearest to urban cores tend to generate the most money.
“All of our systems have to go to the suburbs. That’s a huge, huge cost driver because you’re making longer trips for less people,” said Zoe Baldwin, the director of state programs at the Regional Plan Association, a nonprofit that works in New York, New Jersey and Connecticut.
That creates an almost inevitable conflict between urban transit and everyone else. Either the mass transit network serves people outside the city and loses more money and needs more subsidies — or it doesn’t and therefore doesn’t do anything to garner their support.
So some suburban voters want better service but don’t want to pay for it until they get it.
That’s the problem facing Murphy in New Jersey. At the same time he’s the suburban foe to New York’s MTA, his plan to fix his state’s public transit agency, New Jersey Transit, is running into opposition from suburban and rural politicians within his own state, which is the nation’s densest.
His plan to fill a budget gap at NJ Transit involves raising taxes on the state’s largest businesses. One of the first critics of the tax increase was a South Jersey business group that complained public transportation in its part of the state was “scarce, and the regional workforce suffers as a result.”
During legislative budget hearings, NJ Transit CEO Kevin Corbett fielded several questions from lawmakers about the lack of robust service outside of North Jersey.
Corbett said he’d like to expand services but that takes money, something the agency doesn’t exactly have a lot of. Its board just voted to raise fares by 15 percent and it still faces a roughly $800 million budget gap beginning next summer.
“We were created 40 plus years ago out of bankrupt bus lines and railroads,” Corbett said during legislative testimony. “So that’s sort of what we inherited. So a lot of our service patterns were dictated then.”
Officials at WMATA, which serves the Washington, D.C., metro area, just approved a 12.5 percent fare increase. That’s smaller than feared only because Washington, Virginia and Maryland leaders coughed up hundreds of millions of dollars to prevent larger fare increases.
But that’s one-time money that just kicks the fight to next year. It’s a problem that WMATA officials and regional politicians are hoping to address by creating a 20-person task force to look at longer-term fixes, including a possible tax.
“They understand we’ve got to solve this issue once and for all, we can’t keep doing this year after year,” WMATA board chair Paul Smedberg said during a press conference after the agency’s fare hikes were approved.
In other places, transit officials are in the middle of a fight to save their fixes from being picked apart by suburban foes.
In Pennsylvania, Gov. Josh Shapiro’s first big transit push since taking office last year is shoring up SEPTA, the rail and bus system in and around Philadelphia. The plan, to devote more money from the state’s sales tax to transit, will require approval from suburban and rural politicians. The state government is divided — Shapiro and the House are Democrats, but the Senate is controlled by rural and suburban Republicans wary of spending more in the city.
But Shapiro’s plan isn’t just for SEPTA, which may make it easier to pass. It would send $283 million to transit agencies across the state. Much of that goes to SEPTA, but over 50 other smaller transit agencies will get millions too.
So far, that hasn’t sealed the deal, but it may make it easier to reach one that avoids fare increases or service cuts.“This governor is well aware that when counties and districts invest — in rides for seniors, those with disabilities, let people make mobility choices, help with climate issues, sustainability, economic development — that is an investment in those communities,” said SEPTA’s head, Leslie Richards, in an interview.
Even if Shapiro’s plan gets through, there are other long-term issues facing SEPTA. The sales tax money would help fill an annual operating gap, but SEPTA is still looking for authority for the areas it serves to levy their own taxes just for the agency.
That bill is being discussed, but not yet moving.
Transit systems are also dealing with ongoing safety concerns. At the MTA, officials are arguing that, despite high profile tragedies, crime is down. At SEPTA, Richards said she is working to assure lawmakers that money is going toward making the system cleaner and safer
“People have to feel good about riding us for our ridership to increase,” she said.
Across the country, California, a state famous for its expansive highway system and history of prioritizing driving over public transportation, is no stranger to its own transit fights historically. But state and local officials have largely avoided public feuding in recent years, and the state’s approach to transit funding could offer a path forward for its Northeastern counterparts.
The source of the peace is a population-based formula that not only applies to the gas tax that funds much of the state’s transit, but also to one-time spending. Most of the $5.1 billion transit package that lawmakers passed last year is divvied up by population, reducing conflicts.
“Bus agencies have as strong a shot of getting funding as rail agencies and rail projects,” said Michael Pimentel, executive director of the California Transit Association, which represents 81 bus, rail and ferry operators, along with dozens of regional government agencies.
That’s not to say California has it all figured out. Both urban and rural transit systems are still facing fiscal cliffs even with recent funding increases — about half of last year’s package is currently frozen as Gov. Gavin Newsom navigates a record budget deficit.
Pimentel said he was worried the delay could push federal funding agreements until after the presidential election, jeopardizing one-time funding from the Biden administration.
“The temporary delay in funding to California transit agencies is not without real-world impacts,” he said in an email.
Alex Nieves and Debra Kahn contributed to this report.