N.Y. aside, big problems in US mass transit

Revenues are falling, workers are being laid off, and those left aren't happy with pay.

Even though a New York subway and bus strike has been averted, the nation's mass-transit systems are facing some cold, hard choices.

States and counties, which provide subsidies for those rail systems and buses, are talking about cuts in their contributions. This is prompting public-transportation operators from the rolling hills of Santa Clara to the wind-swept lakefront in Cleveland to scramble for new funding, lay off workers, and cut routes.

And while fares are rising, travelers are fleeing back to cars. On top of all this, workers are unhappy with their pay and working conditions - just ask New York, whose transit negotiations were hung up over these issues.

"It's not a pretty picture," says William Millar, president of the American Public Transportation Association (APTA).

In a survey this past summer, the APTA found that two-thirds of all responding transit agencies had a reduction in ridership. More than half had decreases in revenues. Sixty-six percent had either raised fares or intended to.

The public-transit woes come at a time when Congress is starting to consider a major $200 billion bill called the Transportation Equity Act for the 21st Century. Much of this money funds highways, but some will go to the states for capital projects, such as a new subway line in New York City. "I think the intention is there to spend more money on transit," says a spokesman for a House committee working on the bill.

Any money will be welcome, since most systems say the economy is wreaking havoc on them. For example, in the Santa Clara, Calif., area, the implosion of the dotcoms has sent the unemployment rate from 1.2 percent to 7.8 percent. This has been devastating to mass transit, which gets 80 percent of its funding from sales-tax revenue.

So after a drop of 21.4 percent in sales-tax collections this past fiscal year, the Valley Transportation Authority reduced service by 5 percent and increased fares by 15 percent. More than 10 percent of VTA's workforce got pink slips. And $71 million in capital spending was deferred or canceled. The system just finished a public comment period for another reduction that could be as much as 10 percent.

"What's killing us is the reduction in business-to-business sales, and until that segment recovers, we are going to continue to have serious deficits," says John Pilger, a VTA spokesman.

The transit system is not much better off in Pittsburgh, which has been hit hard by the financial woes at US Airways, one of the area's largest employers. In addition, Kaufmann's department store laid off 1,500. "If you are not working, you are not taking transit," says Judi McNeil, a spokesman for the Port Authority of Allegheny County.

Transportation officials have raised fares, cut service, and laid off workers. Their travel budget was cut in half, and the marketing budget lost 30 percent. Training expenses have been pared. And workers didn't get any raises in the first year of their contract. "We have both cut costs internally and had to go externally and cut our services," says Ms. McNeil.

The budget crunch is forcing some transit systems to become more customer-friendly. That's the case in Cleveland, where a new general manager, Joe Calabrese, has enacted a "ride happy or ride free" program. He also has customer feedback days where he listens all day to consumer complaints. And he issues a periodic report card that is made public, no matter what it says.

In California, which is beset by huge budget woes, transit could take a big hit. Gov. Gray Davis has proposed cutting $1.8 billion in transportation funding. In Los Angeles County, that may mean a loss of as much as $500 million over the next 18 months. Even before these cuts are announced, the Metropolitan Transit Authority, the nation's second-largest system, is projecting a $1.4 billion loss over the next 10 years.

"Any cut in state aid would be pretty serious for us," says Mark Littman, an MTA spokesman.

The Los Angeles transit system is also under a federal court order to improve service to avoid overcrowding. It has already spent $700 million on new buses.

Mr. Littman notes that it would be difficult for the system to raise fares. Many of its users are senior citizens, who get discounts. "Politically, there is a limit to what you can raise," he says.

In New York, with the nation's largest transit system, the possibility of higher fares may help bridge a $1 billion-plus budget deficit. Fares were expected to go up - perhaps from $1.50 to $2 per ride - even before the Metropolitan Transportation Authority (MTA) reached a settlement with its labor unions.

On Monday, the unions settled for a $1,000 cash bonus but no raise in the first year of their contract. That will be followed by two annual increases of 3 percent. Each 1 percent costs the MTA about $20 million per year. The MTA has yet to disclose how it will solve its budget problems.

Some transit systems are trying to be more creative to obtain more revenue. For example, anyone thinking of getting married in Cleveland now has a new venue for the reception: a 1,000-foot walkway that connects the city's sports centers with a transit hub.

Says Jerry Masek, a spokesman for the Regional Transit Authority: "It's got great views of the riverfront."