Sound Transit hopes doubling federal funding for Lynnwood Link and Federal Way Link could right their storm-tossed financial ship.
Joining 25 other transit agencies from across the nation, Sound Transit and King County Metro are requesting that Congress act to provide an additional $36 billion in emergency funding through 2021. This comes on the heels of $25 billion that Congress approved through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March.
In a joint letter to Senate leaders Mitch McConnell (R-Kentucky) and Charles Schumer (D-New York), the transit agencies gave a stark warning about the future ahead without federal assistance. “While the initial CARES Act funding allows us to keep trains and buses running today, the funding will not sustain us through this protracted crisis, the breadth and depth of which is still unknown,” the letter reads. “As state and local tax revenues that many agencies rely on continue to fall, some transit systems may be forced to lay off the workers who have operated the systems through the pandemic. Others are considering cutting or even curtailing service just when the public needs transit to get back to work and school.”
The coalition of transit agencies that have joined the effort is broad. These include the biggies like New York City (MTA), Chicago (CTA), Washington, D.C. (WMATA), and Los Angeles (LA Metro). But others like Kansas City (Ride KC Streetcar), Cincinnati (SORTA), Indianapolis (IndyGo), and Jacksonville (JTA) have also joined the campaign.
In the letter, the transit agencies emphasize the importance of keeping America moving, particularly for essential workers and trips in their communities. “Together, our regions account for 46% of the metropolitan gross domestic product, and we move almost 22 million Americans daily. The mobility we provide is crucial to the function of our nation’s economy,” the letter states. “Our transit systems collectively move millions of students throughout the school year and are responsible for getting millions more people to work every day. For many, public transit is the only link to major medical centers and health care providers.”
The financial outlook for Sound Transit and Metro is fairly grim. For Metro’s part, the agency is projecting revenue down $200 million for 2020 and a widening loss of $465 million through 2022. Expanding the lens out 10 years, Metro anticipates a sales tax loss of $1.2 billion due to lowered economic activity. Sound Transit, meanwhile, has warned that the agency could take a $1.1 billion financial hit through 2021 and a wider $12 billion hit through 2041 for the same reasons as Metro.
CARES Act funding has softened the blow for both agencies. Metro received $242.8 million in direct grants while Sound Transit received $166.3 million. The wider Central Puget Sound Region received $538.5 million benefiting other local transit agencies, such as Kitsap Transit, Community Transit, Pierce Transit, and Washington State Ferries. Funding through the CARES Act allows for broad use in expenditures to respond to the Covid crisis, such as administration, operations, and related capital investments.
The fallout of dwindling tax revenues is impacting how Sound Transit and Metro are managing their budgets. Metro is contemplating bus service reductions of up to 30% for the foreseeable future and making similar cutbacks for capital investments by delaying RapidRide projects, fleet electrification, and spot improvements. Sound Transit has slowed down many capital investment and expansion projects for the interim and is expected to realign Sound Transit 3 projects next year, which could involve substantial delays in completion and reduced project scopes.
During a press conference on Tuesday, Sound Transit Chief Executive Officer Peter Rogoff addressed the critical service that local transit agencies provide and needs for more emergency federal funding to respond to the Covid crisis.
“Today, Puget Sound commuters need transit service really more than ever to reach their jobs at hospitals, airports, manufacturers, and other essential services. And as the virus threats begin to lift, they will need services like Sound Transit and King County Metro even more to return to jobsites and attend sporting events, universities, churches, and social gatherings,” Rogoff said. “The only way the transit agencies will be able to move people in our economy is if the net federal response to Covid-19 is focused on replenishing the revenues that are disappearing all around around us.”
Rogoff did express concern for longer term recovery, too. “Back in the Great Depression, public works was at the center of the nation’s recovery,” he said. “And back in 2010, Sound Transit construction in this region was elemental to the recovery of this region. We want to continue to serve that purpose during the recovery that is going to be needed from this pandemic and the associated recession.”
Amidst the Great Recession, Rogoff said that Sound Transit was one of the few major entities in the region that was able to put people back to work in construction. That was because major capital expansions projects still had funding and were on the books. That is still true today, but the financial toll that the Covid crisis presents will blunt some of that lift without additional federal assistance.
As Rogoff noted, the Puget Sound region is heavily reliant on local and federal financing. The vast majority of funding comes locally from the sales tax, though motor vehicle fees, property taxes, and fares are also in the mix. Resorting to state assistance is unlikely to be very fruitful since the state legislature has consistently refused to fund transit in any meaningful way and now faces its own budgetary crises. Sound Transit literally receives no state funding and other transit agencies get paltry grants, so the idea by some federal heads that state and local governments should fend for themselves is myopic.
The meeting targeting the United States Senate was a strategic one as it has been the main hurdle to passing legislation in responding to the Covid crisis. The lower house has been more than willing to provide broad funding for all sorts of national priorities since Democrats have a lock on the chamber. Republicans, however, control the Senate and have maintained a general austerity approach to governance, exacerbating the challenges that Covid faces to all levels government.
Rogoff was optimistic about some of the work that the House of Representatives have accomplished recently on the transportation front. In his remarks, he made note of Moving America Forward Act, which has passed the United States House of Representatives, and progress of a corresponding 2021 appropriations bill in committee. Provisions in the Moving America Forward Act could provide beneficial to many transit agencies since they could renegotiate the terms of existing full funding grant agreements (FFGAs) with the Federal Transit Administration.
Transit agencies that receive FFGAs must put up a substantial share of money on their own to fund projects. The grants only cover a certain percentage of the total project cost. But if the Moving America Forward Act becomes law, existing FFGAs could be reopened and increase the federal share in providing grants. That could mean additional retroactive grants freeing up money within transit agencies for other purpose.
To date, the Federal Way and Lynnwood Link light rail extensions have benefited from $1.96 billion in FFGAs. Increasing those FFGAs could be a big windfall and lessen the pain in any Sound Transit 3 capital program realignment. In fact, a separate letter to Senator Patty Murray indicates that the Lynnwood Link extension project benefited from 36% match in grants while Federal Way Link extension garnered a 25% match in grants. The proposed Moving American Forward Act provisions thus would move the needle forward with a 30% increase in matching grants thus netting as much as an extra $1.9 billion for Sound Transit.
Rounding out his remarks, Rogoff said that action by the House of Representatives was the “sound of one hand clapping” and urged the Senate now follow suit to act. In the near-term, it seems like some second round of CARES Act-like emergency funding could materialize as existing emergency response funding dries up and the federal elections heat up heading into the fall, but a larger Moving America Forward Act package seems much further off.