Detroit-based Suburban Mobility Authority for Regional Transportation (SMART) and unions representing more than 800 of its employees failed to reach concession agreements, causing the agency to cut bus services by 22 percent and lay off 123 employees.

The unions — Amalgamated Transit Union (ATU), United Auto Workers (UAW), American Federation of State, County and Municipal Employees (AFSCME) and Teamsters — have been without a contract since the end of December 2010.

Throughout the recession, SMART worked to maintain the existing bus service. The agency’s management has instituted $11 million in budget adjustments over the past three years, including a fare increase. However, revenue continues to drop due to lower millage collections and reduced state and federal funding, while at the same time, fuel and healthcare costs have increased.

SMART is supported by local property taxes, farebox proceeds, and state and federal funding. The biggest loss in revenue has resulted from the drop in property values — a 24 percent decrease since 2009, with an 11 percent decrease in millage revenue this year alone.

To add to the financial woes, SMART will receive less state and federal funding because of the cuts in service made by the Detroit Department of Transportation (DDOT). While all other Michigan transit agencies are funded independently of each other using uniform formulas, Michigan’s Act 204 treats SMART and DDOT as one entity for funding purposes. This means any cuts made by DDOT reduce state and federal funding available to SMART. This year DDOT implemented two rounds of service cuts, in June and September, thereby causing more revenue loss to SMART.

Since November 2010, SMART has been in negotiations with each union. After nine months of negotiating, no agreements have been reached. SMART’s non-represented employees have already taken wage reductions and other benefit concessions. Without the union participation in wage and benefit concessions, SMART is forced to cut bus services.

For additional reporting on the cuts from The Detroit News, click here.