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Chances of Service Cuts and Layoffs Rise Due to Budget Impacts

Chances of Service Cuts and Layoffs Rise Due to Budget Impacts
By Bradley Dunn

At today’s SFMTA Board meeting, the Director of Transportation discussed how the pandemic has caused catastrophic revenue losses, and the SFMTA does not expect revenues to return fully for years to come. While the SFMTA is in a stronger financial position than our peer transit agencies, and we’ve worked to realize more than $100 million in savings during the pandemic, we are projecting the need for substantial service cuts and layoffs to make up for projected revenue losses of $607 million.

These cuts will be painful and difficult both for the people of San Francisco and our employees. We continue to work with our elected leaders and have reached out to President-elect Biden’s transition team as well to repeat the calls from across the industry for the urgent need to secure federal support for our nation’s transit systems.

Federal CARES Act funding helped to replace hundreds of millions of dollars of lost revenue but was not enough. We are currently projecting that the pandemic will cause a loss of $607 million of revenue through June 2023, even after spending our CARES Act funds.  If the SFMTA had not received these funds, more drastic measures would have been necessary earlier on in the pandemic. In addition, service reductions and layoffs would have occurred already.  By the end of the month, we will have spent all of our CARES funding keeping our workers employed and Core Service running to support essential workers across the city. 

To make up for our lost revenue, we must cut spending even further. Our forecasts indicate the need for layoffs of between 989 to 1,226 full-time positions, or up to 22% of the workforce to close our Fiscal Year (FY) 2022 projected deficit.  Every employee that we are forced to layoff hurts our ability to provide services. We depend on each of our employees to provide the transit, street safety and other services on which the public relies. 

We do not know exactly how these cuts will be spread throughout the agency, but we do know that these cuts will hurt all San Franciscans. Cuts could include:

  • Combined with our previous service reductions earlier this year, we might only be able to operate about 35% of the pre-pandemic service
  • When schools reopen, we may lack the funding to pay for crossing guards and other school safety programs
  • Discontinuing the Essential Trip Card program, a discount program helps seniors and people with disabilities pay essential trips in a taxi when many people lost access to their local bus service

Each of these cuts would make transportation in San Francisco harder, less equitable and more harmful to the environment. But we have no choice.

We wish that we could tell you exactly what the future will hold, but there is just too much we don’t know.  We don’t know how long the pandemic will last. We don’t know how quickly our customers will return. We don’t know what the economy will look like in the future, or if there will be any additional federal help. In addition to the revenue loss we currently project, there is even further potential risk to our revenues. It is possible that over the current 2-year budget period, there could be additional financial risks to our budget. If our revenues come in below projections, the situation may be even worse.   

Given these revenue losses, we are working hard to save money. We have cut overtime spending by 48% compared to last fiscal year. We instituted a hiring freeze for all but the most mission-critical positions. Combined with other fiscal controls, the SFMTA has found $118 million in cost reductions this fiscal year. The majority of those reductions have been in non-labor costs. Finding additional reductions without reducing our labor costs will be increasingly difficult as we cannot put off purchasing critical supplies --like parts --while still providing services.

We cannot survive without new funding and we will be looking for different ways to secure additional local revenue.  We are considering a wide variety of options to supplement our revenues including a general obligation bond, a community facilities district and reauthorization of the Prop K sales tax. There are tough times ahead and we need the support from the people of San Francisco so that we can provide the high-quality transit and other services that they deserve and depend on.

 



Published December 02, 2020 at 09:46AM
https://bit.ly/39Cjd6j
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