BART could face nine-figure budget deficits as soon as the 2023-2024 fiscal year without a significant increase in its operating revenue, the transit agency’s budget officials said.
The concern, BART Financial Planning Director Michael Eiseman told the agency’s Board of Directors, is that while ridership is currently ahead of projected totals through September, the Bay Area’s slow return to offices could trickle down to a long-term loss of fare revenue for BART.
According to data from the Bay Area Council, office occupancy as of mid-October is only at roughly one-quarter of 2019 levels in both the San Francisco and San Jose metro areas.
Both totals trail Los Angeles, which sits at 33.1 percent and the Houston, Austin and Dallas metro areas, all of which hover around 50 percent.
Eiseman noted that BART’s weekday ridership recovery has been closely aligned with Bay Area residents returning to their offices, as the agency is hovering between 25 and 30 percent of its pre-pandemic weekday ridership.
“The two stats have tracked very closely throughout the pandemic,” he said, “which just underscores how important return-to-work timelines and extent is to our ridership future.”
BART’s current budget includes a widespread projected return to the office over the next six months, with a baseline expectation of 50 percent of pre-pandemic weekday ridership returning to the system by March.
Eiseman also shared data from the Bay Area Council showing that most employers in the region expect their employees to be in the office only three days per week once the pandemic subsides.
While BART still has hundreds of millions of dollars in federal pandemic relief funding available, Eiseman told the board that that funding is expected to be depleted by fiscal year 2023 or 2024, depending on the deficits the agency need to cover over the next two years.
Fare revenue is also not expected to account for two-thirds of BART’s operating revenue as it did before the pandemic, leaving BART facing the task of creating an entirely new operating revenue stream as well as maximizing non-fare revenue like advertising and parking or exploring additional regional, state or federal subsidies.
Eiseman also noted that the agency’s looming financial shortfalls are also unlikely to be assuaged by reducing service hours as the agency did during much of 2020.
“Because of the relatively high fixed costs and low marginal cost of operating rail service, combined with the importance of ridership recovery for our revenue, we don’t believe that service cuts would improve our fiscal position in this environment,” he said.
BART Budget Director Chris Simi acknowledged the same, saying that BART cannot “cut our way out of this.”
“Without significant additional revenues, BART cannot continue to operate as it does now,” Simi told the board.
Earlier this year, BART’s budget officials suggested that ridership wouldn’t even return to 80 percent of pre-pandemic levels until the end of the 2020s.
On Thursday, Simi said the agency’s worst-case projections include the recovery of 65 percent of pre-pandemic ridership by 2026.
“This is a very sobering discussion,” Board Director Liz Ames said. “I had a feeling this was going to happen last year.”
Budget officials said in the coming fiscal years, they will work with the board to expand their budgetary planning window from one year to two.
While the board will still adopt an annual budget, Simi said the two-year financial planning window will make it easier for the transit agency to plan for the exhaustion of its federal relief funds.
The first such two-year planning window will be for the 2024 and 2025 fiscal years, according to BART budget officials.
“It is particularly relevant right now as a two-year expenditure planning window includes, in our (worst-case) scenario, the date we may be expending our final federal dollars,” Simi said. “This approach allows us to mitigate the risk by addressing it earlier.”
56 comments
They don’t just need to find new revenue. They need to stop paying so many people, so much money. They have a ton of employees making as much or more on overtime as their base pay. Add in their retirement and………. See for your self, and this is just over 4000 employees in 2019 https://transparentcalifornia.com/salaries/2019/san-francisco-bay-area-rapid-transit-district/
I always said go out and get yourself a good government job. No one in my family listened to me.
Wow I need to apply for a job at BART I had no idea they paid so well. I bet if you privatized BART, eliminated the Union and cut the management staff in half BART would be profitable.
A train operator that made $79,616.76 in 2019 for sitting on his butt looking out a window, made $92,630.33 in overtime. What a sweet deal.
Thats what happens when you shut down the economy for the flu.
@Deb I can’t remember another year where the flu killed 700k Americans.
Weird.
@Greg, 1918 Spanish flu killed 675,000 US people. That was when the US population was 106 million. Today, we have 340 million. So the rate of death was higher for the Spanish flu.
Ridership down? Revenues low? Time for some layoffs.
Oh, but they’re all union slackers and probably can’t be laid off.
BART needs to cut back on salaries, stop over spending, stop fare evaders and stop raising fares on trains. Bart has been a joke for years another socialists item we suffer from in our government-federal and county.
People need to push back and stay firm.
They should raise fares. That will attract more passengers.
I know you’re joking but it’s already so overpriced, it’s like half the cost to just drive there for me. The trains are dirty. Hell, many of the stations don’t even have bathrooms, the ones that do are sad.
@anon – I used to commute from Lafayette to Daly City by BART and my Toyota Corolla in the early 1980s.
The round-trip BART fare was $2.50. Parking at BART was free back then.
On the days I took the Corolla, I needed $5 for gas and $1 for the bridge toll. The total was $6. Oh, that $5 got me 3 gallons of gas.
The same trip on BART today is $11.60. Add $3 for parking. The total is $14.60.
Given gas is about $5/gallon today and the toll is $7, it’s $22 to take that same Corolla today.
It was more than twice as expensive to drive back then and still significantly more expensive to drive today. If I have the math wrong, fee free to correct me.
BART was very clean back then. I rode it for three years and only saw a homeless drunk on the train once. The only trash were copies of the SF Chronicle left by the suits. The expansion of the Concord line and the changing demographics of Concord changed the character of the Concord line commuters.
I hear it sucks today.
Well it’s time to make changes.If they can’t make it then do what a private business owner would have to do to stay in business.Cut salaries and benefits or lay of people.It’s time for the gravy train to end.
The labor agreement after the last strike was unaffordable and new reality of funding shortfalls call for drastic action. Bart has to cut overtime immediately and at the very least freeze salaries for at least the next decade to bring costs in line with revenue.
Is this when we are suppose to feel bad? Open our pockets?! Lol
SMH Bart has taken enough of our taxpayer money. Maybe if they weren’t busy building as many apartment complexes and high priced parking lots, they wouldn’t be running out of cash. What a joke. Oh hey and maybe clean things up a bit and keep all the trash off the train.
Looks like it’s waaaaaaay past time to close the rolling drug dens known as bart cars. There, I just saved management millions in consulting fees on how to increase ridership!
Simple measures like that will guarantee increased ridership, along with a cleaning campaign of the cars with solid PSAs showing that effort.
Anybody on the BART board familiar with mops and brooms?
And while BART is chanting, like in the Wizard of Oz, about Lions and Tigers and Bears, Oh My! they still have plans in the works to do another tunnel under the bay, expand the lines in all directions, building low income housing, and will not lower the pay of people pushing a plastic button at the front of the train and getting paid a six figure income for it.
Time for pay cuts and layoffs…
BART has been on a steady decline for a decade. It’s become a disgusting haven for criminals and the homeless. A normal person cannot ride it without being harassed or subjected to indecency so it shouldn’t come as a surprise no one is riding it.
BART itself has been more interested in blowing funds on woke ideology and real estate development than on fixing its problems.
Disband it and start over.
Create a better product! Step one, secure the system, only paying passengers get into the system. Things will improve real fast.
screw urban renewal and bart
“It is particularly relevant right now as a two-year expenditure planning window includes, in our (worst-case) scenario, the date we may be expending our final federal dollars,” Simi said. “This approach allows us to mitigate the risk by addressing it earlier.”
Fancy words but will they do anything?
BART Budget Director Chris Simi acknowledged the same, saying that BART cannot “cut our way out of this.”
The first step should be to eliminate the the Budget Director for stating such nonsense.
There’s a lot Bart can do, but they won’t.
They’ll try to get a tax increase by the voters which will fail.
Then the State will fund them and all will be good, for them.
We’ll all still have an over priced and under performing joke of an electric train,
that can, on, occasion, still work as a commute train.
Just keep the doors open for ventilation.
Just remove the failed train system. It’s not a normal business it’s a government project. If people don’t want it, vote it away.
The BART Board doesn’t have to ride it, so what do they care.
This is what they get for holding the whole Bay Area hostage when they went on strike a few years ago. One of Glazer’s campaign promises was to make sure they were never allowed to do it again. What has he done about it so far? Zip!
Fire the board and start over with people who have business experience AND a track record of success. Then let them go to work.
Take the old board and put them on the Newsom Merced to Bakersfield train project. It’s not going anywhere anyway so let them bleed that instead.
Perhaps I’ve been too subtle here. I suggest bringing in people with a track record of success. Their political affiliation is irrelevant as long as they have a track record of success. When people are hired who have a track record of success, they are typically quite adept at identifying problems and inefficiencies and correcting them.
A track record of success?
Are you sure about that?
@Fearless: yeah we need more “business people” in government like Donald J Trump and Louis DeJoy.
Maybe we should have the folks that run comcast run more things. They’re good at capitalism.
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Can you say “bailout”?
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IT’s so funny reading the captains of industry here tell us we don’t need BART, just get rid of it. Millions and millions of dollars riding those trains every day and of course the best solution from our hard core capitalists is DERP GET RID OF IT.
THese are the same folks that insisted a trade war with China would work.
@greg – Disregarding your continuous straw mans and ad hominem attacks, you do realize that as of May 2021, total BART ridership has only increased 10% since the lockdown level of -95%? BART ridership is still down -85%.
That level of ridership is unsustainable. If BART were a normal business that relies on profit to survive, there would be major layoffs and pay cuts until ridership increased. And if ridership failed to increase after a certain amount of time, the system would be sold or shutdown. This is how the real world works. If the people deem a system unnecessary, which based on ridership, apparently they do, the system should be done away with.
BART has been a bloated beast for years. From the board to the overpaid union workers. As your hero Obama used to say, it’s time for change.
BART is the perfect example of why communism doesn’t work. You’re welcome.
Signed, Captain of Industry
And how many thousands of riders can now work from home with no need to go into the office?
It was a good idea when there was still a need to commute.
Its also funny how liberals put all their inconsistent ideas in separate little boxes. In the past your readings have probably created another separate box convincing you how transit systems like BART are horrible for the environment because they encourage urban sprawl. So when you think about polar bears you hate BART, but when you think about electrical stuff being better than gasoline, you like BART.
Now you’re just making stuff up. Please show me any credible cite that public mass transport is horrible for the environment?
The drug use must alleviate their constant state of cognitive dissonance .
JWB: An example you request is David Owen’s Green Manhattan printed Oct. 18, 2004 in The New Yorker. He compares a dense population center like Manhattan where everyone is close to work and doesn’t need a car, to one where a mass transit system like BART encourages people to locate away from the city center, own a house, two cars and commute in on BART.
And from that you conclude that he suggests the solution would be to shut down BART and have everybody commute by car? Have you ever heard about transit villages at BART stations?
JWB has never been stuck in traffic behind an idling bus on a hot day.
JWB: You asked for a reputable source for how a mass transit system can be horrible for the environment, and I gave you one. Your response is to change the topic to transit villages? We are the test case on those and they are not going well. Everything the government does has unintended consequences and screws up other things, like the transit village destruction of ethic neighborhoods in San Jose. Perhaps you could go back up a few comments and read what Sam says, that it is a government project. It is being imposed on us by people who think they know better. We should do a rethink on the whole BART idea and not accept what guys in blue suits thought in 1970 as to what future travel should look like. They also had us in jet packs and nuclear powered cars. The housing projects in Detroit that these same clowns in blue suits dreamed up were torn down long ago.
@To Do List…. I’ll pass on the jet packs but I’ll take that nuclear powered car, can I get it in a blue Ferrari 250 GTO body?
Okay TDL you have not provide the article so I don’t know what it really says. You mentioned “everyone is close to work and doesn’t need a car” that’s the idea of transit villages that people would live close to BART stations and not need a car. Maybe transit villages don’t work but that’s not the question here.
Sam’s contribution is the usual “BART is the perfect example of communism” which is really not worth even to consider. There is not a single developed nation on this globe without masstransit so everything is communism bla bla bla
But back to you. Your solution seems to be “We should do a rethink on the whole BART idea and not accept what guys in blue suits thought in 1970 as to what future travel should look like.”
So scrap masstransit and either deal with congested roads or build massive more roads and parking? And the elderly or the young who cannot drive in their own vehicles, too bad you just need to stay at home or hire a driver?
JWB: BART is not working very well for the population. When something is failing, we should look for alternatives. Instead of being the solution, BART is generating much of the problem by encouraging urban sprawl. I put in a few keywords and found the article in less than five seconds, which means you are doing the troll thing of just trying to get people to waste time for your amusement so I’m done with this particular discussion.
Look how argumentative little jwb gets when someone gives him what he asked for. You have a meltdown every time you’re given facts you don’t like. Do you know who does that? Snowflakes, snowflakes do that. Time to grow up little fella. You don’t always need to shill for the state.
Did you hear Elon Musk call out the UN for raping children again? You shills are on the wrong side of history in every way.
I don’t remember the last election cycle where Bart and area transportation measures were not on the ballot during a regular election season. Bart is always putting their hand out asking for more money. So are they offloading plans for their ivory tower complex in Oakland or are they just going to stick office staff into portables dropped off in their unused parking lots?
Bro, my car gets just 22 mpg. Whenever I punch directions into Maps and check the “public transportation” option, taking BART will generally increase the expense of my travel by an additional 100% to 150%. Try it yourselves.
Imagine paying at least twice as much to sit in a dirty train with broken air conditioning, having to constantly watch your back because the train system is full of criminals and aggressive homeless people, or just human waste you need not step in.
How BART can’t be making money is suspicious to me. It’s almost hilariously overpriced for what it is, and the state of disrepair and near-anarchy that characterizes the interior of its trains.
Y’know they always say trains are safer than cars due to car accidents vs train accident fatalities, but I wonder if they took into account all the murders on trains, it might correct the balance.
“Did you hear Elon Musk call out the UN for raping children again? You shills are on the wrong side of history in every way.”
No, Sam, most people don’t get their news from Elon Musk. Thanks for running to tell us what Elon said.
“@greg – Disregarding your continuous straw mans and ad hominem attacks, you do realize that as of May 2021, total BART ridership has only increased 10% since the lockdown level of -95%? BART ridership is still down -85%.”
Vast majority of companies still have either WFH or hybrid policies. Companies haven’t opened up yet, so your ridership numbers are still based on pandemic-levels of travel. (If you try to argue with me otherwise, then you’re just telling us you don’t work for a living.) In fact, May 2021 would have been the earliest they even started planning for return to ofice, and then Delta arrived and crushed that.
You are either unaware of these things or are aware of them and made a disingenuous argument. BART’s low numbers currently are still due to restricted occupancy in offices.
@greg – Have you been following the commercial real estate market? People in the biz tell me the market is going to implode next year. In San Francisco, commercial real estate occupancy is at 20%, the lowest of any American city. This has definitely hurt BART, but again, with BART ridership down -85% and not improving, for how much longer should Bay Area tax payers carry their water?
I’m not saying BART should be killed, just that cuts to service and pay are absolutely necessary for the system to continue. And if ridership is down 85%, a respective cut in capacity is called for.
BART is another black hole where more and more money is thrown at it with no good result. Stop allowing fare cheats, the people at the top and the overtime pay to the union workers to be brought back to normal levels that the rest of us have to live with from our employers.
Stop raising fares for those of us who are honest and stop the money grab period. Just another sick example of how our federal government is run and how it trickles down to those of us who constantly get screwed over by having to cover these foolish issues and have no say in anything any longer. Here me leftists, socialists and the green democratic rip off artists. You all are feathering your nests. What is wrong with people and where has the common sense gone??????
If I have a “structural deficit”, there is no one to bail me out myself, by either earning more money, spending less money, or both.
I would suggest across-the-board pay/benefit decreases, layoffs and service improvement to correct this problem. When BART fares account for only 2/3 of the revenue required under the best of circumstances, there is a systemic problem requiring outside intervention.
“Bob 5 November 2, 2021 at 7:28 AM
@Greg, 1918 Spanish flu killed 675,000 US people. That was when the US population was 106 million. Today, we have 340 million. So the rate of death was higher for the Spanish flu.”
Ah, so covid isn’t just the flu then. We agree.
Pave over the tracks and make dedicated electric bus lines to sf
Riders will then only associate with people from their own towns
Express buses have enough room to pass other local route on the tracks
The biggest problem many have with Bart is the feeling of apprehension when passing through Oakland and the dirty smelly cars
W.C. to SF in 20 minutes of smooth luxurious comfort
So Greg finally pulls the race card after nobody else mentioned it.
Greg – a liberal AND a racist.
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