Financial Challenges
For years San Francisco's transportation system has been battered by traffic and the demands of a growing economy. Prior to the COVID-19 pandemic, the SFMTA had a growing budget deficit. The revenues from fares and parking that the SFMTA relies on to fund our transportation system cannot cover ongoing expenses for transit service, infrastructure maintenance and safety improvements for people walking and biking. COVID only exacerbated long-standing and growing structural deficits at Muni.
Before the pandemic, operating revenues were declining as a share of the overall Muni budget: from 60% of the Muni budget in FY13-14 to 51% in FY18-19. This led to increasing, unsustainable, one-time transfers to sustain service and operations, which was recognized by the Transportation Task Force 2045 (T2045). Deficits were plugged by one-time sources like the city’s General Fund and now the federal relief funds, which are outside of the SFMTA’s control.
How did we get here?
San Francisco has grown and transportation has changed.
- Uber and Lyft have steadily eroded our parking revenue, even as we’ve expanded paid parking.
- Our fare discount programs – critical for keeping Muni affordable – have also meant declining fare revenue.
- Costs to retain reliable, highly qualified drivers and maintenance staff increase due to the extraordinarily high costs of living in the Bay Area. Even with this, we have been understaffed for years.
This is unsustainable. If we continue along this pathway without change, our gap will continue to grow to a $35.9B funding shortfall by 2050.
Slow Economic Recovery and Impacts to Muni Service
In the near term, federal emergency relief funding is a necessary stopgap, but we need to make our federal funding last much longer than other cities because all signs point to a slow recovery for Downtown San Francisco. Even more so than in other cities, our transportation revenues have been slow to recover.
Our one-time-only federal funds must be used strategically to sustain Muni service and our transportation system through 2023, in order to help our economy recover. We need to spend smartly to avoid a continuous cycle of increased service cuts, reduced ridership and further reductions in revenues that lead to more cuts. If we go too quickly, we risk exhausting our federal reserves too quickly by restoring more Muni service than we have passengers (which would mean running near-empty buses) prior to economic recovery. On the other hand, if we are too slow in restoring service, there won’t be enough transportation options to meet demand which will slow our economic recovery. Our riders will seek out alternative transportation that will lead to declining revenues and additional service cuts.
Muni’s August 2021 service expansion ensures 98 percent of all San Franciscans will have Muni access within two to three blocks of their home, work or school. To determine how best to use our existing resources for the long term, the SFMTA is inviting the public to provide feedback on proposals for how Muni service will be restored in early 2022.
Our goal is to restore Muni service in a carefully planned manner to help the economy and then allow the economy’s growth to help us increase service that is sustainable for the long term.