Public transit cuts will make Bay Area economic recovery difficult

Public transit cuts will make Bay Area economic recovery difficult

By Mike Rosenberg
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The Bay Area may be headed down a longer, bumpier road in its journey from recession to recovery if public transit continues to carry fewer commuters.

As the region attempts to push toward economic recovery in 2010, transit agencies expect to be moving in the opposite direction, stuck offering service levels and fares established during the downturn - or worse.

Experts question whether transit operators will be ready when residents start getting back to work, and whether service funding problems will in turn slow the region's economic recovery.

"I think it's going to be a tough ride because what we're starting to see at some of the agencies are cuts that are getting so severe that they're going to make transit not truly functional
for many workers," said Stuart Cohen, executive director for Oakland-based TransForm, a transportation and land-use nonprofit.

When that happens, the "wine bottle" effect will kick in, predicts transportation expert Rod Diridon, whose name adorns the San Jose Caltrain station. Like a wine bottle narrowing at its neck, traffic flows smoothly until it reaches a point where additional cars can no longer fit.

"Then we're going to be running into terminal gridlock like a brick wall," Diridon said. Cohen predicted traffic at "unprecedented levels after the economy rebounds."

Traffic jams are not only frustrating but also damaging to the economy. Last year they cost Bay Area companies $3.6 billion in lost productivity, according to the
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Texas Transportation Institute, which studies metropolitan regions.

"The economy follows transportation," Diridon said.

There is a potential bright side for transit agencies: Frustrated drivers may decide enough is enough, and trade their car keys for transit passes. This could give transit agencies the boost they need to rebound financially.

"In the future, our congestion and gas prices are both going to soar," said Erin Steva, a California Public Interest Research Group transportation
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advocate. "(Transit) is soon going to be the better option."

The precedent occurred in summer 2008 when train and bus ridership boomed amid record gas prices, although transit service and fares were better then.

The economic impacts of the current fare increases and service cuts will not be known for some time, but past troubles have provided some lessons.

AC Transit cut its service by 12 percent and raised fares by 15 cents in 1996, saving the agency $4.8 million annually. But it cost riders $48.1 million in added transportation costs, lost income and extra travel time, according to an independent 1998 study.

Already, for every dollar Bay Area public agencies spend on transportation, commuters pay $7.40, a $4.6 billion to $34 billion annual ratio, says a TransForm report released in November. The average Bay Area household would save $5,540 annually if their public transportation access was equivalent to what the best 20 percent of the region has, such as dense areas in San Francisco, TransForm said.

To reach those savings, those communities would need to invest billions in major transit expansions, such as BART's $1.5 billion extension to San Francisco International Airport and its planned $6.1 billion project to reach San Jose.

"A better transportation system will cost public money, meaning new taxes and fees," said Steve Heminger, executive director of the Bay Area Metropolitan Transportation Commission. In the MTC's 25-year plan, $4 of every $5 will be devoted toward maintaining "what we already have," he said.

Transportationwoescould also hurt business growth. New companies vying to become the next Google, Oracle or Yahoo are less likely to launch in the Bay Area if they think workers won't be able to get to work quickly and inexpensively, said Jim Wunderman, CEO of the Bay Area Council, a leading business group.

"We need to be ready for the recovery," Wunderman said.

Manufacturers also will move out, leaving behind jobs and tax bases, if trucking costs skyrocket because of added congestion, said California Trucking Association Chairman Robert Ramorino, a Belmont resident who owns Roadstar Trucking in Hayward.

Longer trucking trips hurt fuel economy and reduce the total number of trips drivers can make, which boosts shipping costs and consumer prices, Ramorino said.

It's also true that money commuters spend on transit is much more likely to stay in the local economy than the cash they fork over to drive.

Cities and local governments only keep a small fraction of gas tax revenues, and because of advances in car technology that have made gas tanks more efficient, motorists are filling up less often, said interim Caltrans CFO Norma Ortega.

Transit fares, meanwhile, are deposited directly into local public transportation budgets. This reduces outside financial assistance from local taxpayers, typically through either transit-specific taxes or county subsidies.