Management & Operations

Layoffs, service cuts plague transit agencies

Posted on May 1, 2003

Several transit agencies throughout the country are facing budget shortfalls, forcing them to reduce costs through various means. A survey done by the American Public Transportation Association (APTA) showed that the economic downturn has produced substantial negative impacts to the transit industry. Fare revenues dropped, government funding decreased and reduced dedicated tax revenues resulted in rising operating deficits. The Metropolitan Atlanta Rapid Transit Authority (MARTA) recently announced the elimination of 100 positions in an effort to reduce costs. MARTA General Manager Nathaniel P. Ford Sr. eliminated 10 senior-level positions, including his chief of staff and two deputy general managers, one for operations and the other for administration. In a press release, Ford said, “These realignments are extremely painful, but necessary to streamline our organization and reduce overall costs.” While 38 of those 100 positions were vacant, MARTA spokeswoman Steen Miles said about 67 of 4,800 employees were actually laid off. “EAP counseling is being provided for staff members who are remaining and those staff members who are departing. None of the positions that were eliminated or impacted were representative employees,” Miles said. “No union people or front-line police, bus operators, train operators, none of those people were [laid off].” Miles emphasized that the agency’s re-organization would impact its service minimally. The elimination of positions is expected to save MARTA about $6.5 million. “I think the elimination of these positions was necessary at this time and you do what is necessary at a given time with the information and resources that you have,” Miles said. “Our objective is to recommend a budget which maintains expenses and the use of reserves at levels adopted in the FY 2003 operating budget without raising fares or cutting service,” Ford said. “We simply cannot achieve that objective without sacrifice. Ridership and sales tax revenues are way below FY ’03 projections. These conditions continue to be a challenging variable in the development of the FY ’04 operating budget, hence a reduction in force is necessary to assure the authority’s delivery of services in a sound fiscal manner.” The Santa Clara Valley (Calif.) Transportation Authority (VTA) has already cut service and is in the midst of talks about more service cutbacks. The agency chose reduction in service over elimination of positions because, over the past couple of years, more than 150,000 jobs were lost in Silicon Valley, said VTA’s Public Information Officer Dina Braun. VTA’s Board of Directors approved in February a 9% service reduction, eliminating about 200 positions, and in 2002, the agency laid off about 10% (550 positions, not all of them filled) of its workforce and raised fares 15%. “For about seven consecutive quarters, [there was] a downturn in our funding for our operations — which is 80% from local sales taxes and the other 20% comes from fare box and other miscellaneous revenues — and sales tax revenues started to go down, and that means our revenue started to go down,” Braun said. The agency had to immediately figure out what could be done to keep service on the streets and retain jobs. FY 2002-03’s budget shortfall for the VTA was about $73.7 million and is estimated this year at $72.1 million. Due to downturns in revenue for the past seven quarters, the agency lost about 33% of its revenue. The VTA formed an ad hoc committee to help approach this with short- and long-term strategies, like finding new revenue streams to maintain and improve transportation services in Santa Clara. The agency has also put together a two-year budget instead of an annual one. “We’re looking at broadening some sales tax, a gas tax, a payroll tax, going to the voters and asking them if we can use one of our existing measures that kicks in 2006, if we can use those funds for operating,” Braun said. “Another one is we’re going back to the public in June about more service cuts. This is where its going to be hard because we’re proposing a 21% service cut.” The New York City Transit Authority is scheduled to slash 381 jobs during the next two years through attrition as part of a budget-cutting plan. The Alameda-Contra Costa Transit District in California previously eliminated 130 positions and cut service. Officials have said the agency is going to be facing that again with more service cuts and layoffs.

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