Public Transit's Fiscal Cliff

As ridership continues to lag amid a stubbornly slow recovery from the COVID-19 pandemic, cities experiment with free rides and micromobility to prove public transit’s worth in worsening financial conditions.

When New York Gov. Kathy Hochul spiked plans to implement congestion pricing in New York City, it took a much-anticipated annual injection of $1 billion out of the mix — just as public transit systems there and elsewhere were looking to the pricing scheme for some good news in an otherwise bleak fiscal landscape.In TFIC’s occasional series, Your Mileage May Vary, senior writers Skip Descant of Government Technology and Jared Brey of Governing discuss the ramifications of Hochul’s decision for transit systems across the country as concerns grow over a looming fiscal cliff from which they may not recover. At the same time, some regions are turning to new policy approaches, including fare-free rides and micromobility solutions, to reinforce the value they bring to their communities.

SHOW NOTES

Here are the top 5 takeaways from this episode:

1. Congestion Pricing Pause in NYC: New York Gov. Kathy Hochul halted New York City’s congestion pricing plan. The plan was set to generate $1 billion annually for public transit, critical for addressing financial shortfalls.
2. Political and Financial Implications: Hochul’s decision may be influenced by upcoming elections, aiming to avoid voter backlash. The halt leaves New York City’s public transit without a vital funding source, exacerbating its financial crisis.
3. Post-Pandemic Public Transit Crisis: Ridership plummeted during COVID-19 and is recovering slowly. Transit systems face significant budget deficits as they struggle to regain fare revenue and maintain service levels.
4. Alternative Funding and Operations Strategies: Several regions are exploring fare-free rides and micromobility solutions to address budget shortfalls. These measures aim to cut costs and attract riders, but their long-term sustainability and effectiveness are uncertain.
5. State and Local Government Responses: Some state and local governments are stepping in to cover budget gaps. The level of support varies in places from New York to Minneapolis, and the financial viability of transit systems heavily depends on continued government subsidies and innovative funding solutions.

Related Links to stories referenced in the episode:

• Transit Agenc