L.A. County transit agency projects historic budget shortfall

L.A. County transit officials are forecasting the largest operating deficit in their history, prompting them to consider cuts to bus and rail service as well as fare increases.

The shortfall, caused by cuts in state funding as well as an 8% decline in ridership over the last year, could be more bad news for L.A. riders, who have long complained about crowded buses and limited services.

“The issue is coming to a head, that they’re a quarter-billion dollars short on operating. . . . Your usual options are to cut service or raise fares,” said Bart Reed, executive director of the nonprofit Transit Coalition, which monitors service at the Metropolitan Transportation Authority and other agencies. “It’s a really hideous situation. Riders are going to feel the pain.”

MTA budget: An article in Saturday’s Section A about the Metropolitan Transportation Authority forecasting a historic operating deficit referred to MTA board member Richard Katz as a Los Angeles city councilman. He has never served on the City Council. —

MTA budget:
An article in Saturday’s Section A about the Metropolitan Transportation Authority forecasting a historic operating deficit incorrectly referred to MTA board member Richard Katz as a Los Angeles city councilman.

The MTA says it is unlikely there will be major cuts to its ambitious rail expansion projects because most of that money comes from grants and dedicated funding sources, including the half-cent-on-the-dollar sales tax that voters approved in 2008.

Transit officials are committed to extending the Expo Line to Santa Monica and building an extension of the Gold Line east from Pasadena. They also want to build the Westside subway and a new Crenshaw Boulevard light-rail line as well as a new line through downtown.

The MTA faces a projected shortfall in operating funds of at least $251.3 million at the end of the 2011 fiscal year.

“If we act in a prudent fashion earlier in the process, we can soften the impact on passengers and employees,” said MTA Chief Executive Art Leahy. “We’re not talking about catastrophic changes; we’re not talking about shutting down the bus company.”

A fare increase -- from $1.25 per ride to $1.50 -- is already planned to begin in July, but officials said that they factored that into the shortfall projections and that another increase could be necessary. How much that could be remains unclear.

There are no firm proposals yet for service cuts, but they might involve reducing hours on lines with low ridership, officials said.

Terry Matsumoto, the MTA’s chief financial services officer and treasurer, said ridership was down 6.3% from July to December over the same period the previous year. Officials said ridership was down a total of 8% in the last year and was continuing to decline. Fare revenues decreased to $155 million from about $170 million over the same period, a problem that Matsumoto attributed to the continuing poor economy and high levels of unemployment.

Sales tax revenues are also significantly lower, and many reserve funding sources were depleted to maintain operations and service in recent years, he said.

But Matsumoto and other MTA officials said the main problem facing the budget was that politicians in Sacramento, trying to cope with the state’s overall budget shortfalls, withheld hundreds of millions of dollars in transportation funds slated for operating expenses.

When the MTA board adopted the agency’s 2009 budget, it included a projected $227 million from State Transit Assistance funds, but only $77 million of that money came in, Matsumoto said. He said MTA officials were predicting the shortfall through fiscal 2011 under the assumption that those moneys would not be provided.

The MTA’s total budget for 2010 was approved at $3.9 billion, and $1.2 billion of that is dedicated to bus and rail operations, including salaries, wages and related benefits. Matsumoto said that it was too early to tell if there would be recommendations to slash jobs or reduce hours but that those could be options.

The cuts could affect municipal bus lines in places like Torrance and Santa Monica because the MTA provides subsidies to those agencies, among dozens of others around the county.

MTA board members and other officials said it was unlikely that any major capital projects would be severely affected by the budget cuts. The recently started $1-billion widening of the 405 Freeway, for example, is mostly covered by grants. The Exposition Line from downtown to Santa Monica is in a similar situation, and many projects such as the Crenshaw Line are funded through Measure R, the 2008 sales tax increase, Matsumoto said.

That means the brunt of the cuts could fall on commuters who rely on bus and train service as their primary form of transportation. Matsumoto said the agency will probably begin looking at how it can restructure existing service to save money without slashing riders’ access.

MTA board member and L.A. City Councilman Richard Katz said he and Mayor Antonio Villaraigosa want service cuts and fare increases to be “an absolute last option.”

Manuel Criollo, an organizer with the Bus Riders Union advocacy group, said he wasn’t surprised that the MTA’s budget woes could be balanced on the backs of riders.

“When tough times come, the only people who feel the pain, or the people who they put the pain on, are bus riders and transit riders,” Criollo said.