Transit agencies across the nation are under serious financial distress. The uncertainty of an economic shutdown combined with riders’ fears about returning to the confined space of a train during a global pandemic pose unprecedented threats to the industry.

BART Director Debora Allen (Kristopher Skinner/Bay Area News Group)

BART is no exception. The agency has lost 88 percent of its riders during the pandemic, representing a drop of $35 million a month in revenue. Its paid ridership is not expected to fully recover for years.

Yet even with ridership demand plummeting to record-low levels, the majority of board directors is behaving as if all is well, approving a budget that actually increases operating expenses by 6 percent and takes funds committed for new rail cars and other infrastructure improvements to plug holes and pay labor costs.

The short-sighted financial solutions passed by the board threaten the long-term future of the nation’s fifth-largest transit system.

This budget, for fiscal year 2021, is not sustainable. It fails to pass the common-sense test. No agency in America can expect to survive the pandemic by providing service to only 12 percent of normal ridership while at the same time increasing spending by millions of dollars a year. It’s fiscal insanity.

The budget, passed on June 25 with little discussion, assumes ridership will increase to 30 percent of normal and contains “aspirational” revenue projections that quickly proved unrealistic. Just 24 hours after the budget was approved, the next round of federal COVID-19 relief funding for BART was announced as being nearly $40 million under the agency’s rosy projections.

The budget delays previous commitments of $123 million in capital funding for new trains and critical infrastructure projects, and $10 million in unfunded pension liability payments. These are deferrals, not spending cuts, which means they will still have to be paid down the road by some future board.

Even the idea of maintaining the status quo on spending proved unpalatable to the board majority. An amendment I proposed with the support of Director Liz Ames to cut proposed operating expenses by $51 million, which would simply bring spending to the same level as it was during the 2020 fiscal year, was somehow considered too draconian to be considered for a vote.

In the end, urban directors on the board preferred to focus only on ways to redirect funds from police services to social work.  There was no discussion about the deferral of debt payments or spiraling labor, benefit or pension costs. Nor was there consideration of cutting BART’s non-transit programs like housing development or real estate speculation.

Admittedly, budgeting an entire year’s worth of revenues with so much uncertainty is a difficult feat.  BART staff engaged a world-renowned consulting firm to analyze potential economic outcomes over the next year.

But ultimately BART staff take direction from the Board of Directors, the majority of whom made it clear that they were committed to the primary goal of maintaining status quo with respect to labor costs. That meant no layoffs, furloughs or pay cuts, despite shortened hours and far less ridership.

Given that labor costs make up 70 percent of the budget, that commitment immediately limited the agency’s ability to cut spending. It meant that revenue assumptions were being driven by planned expenditures, instead of the other way around.  The final budget actually contains a $32.5 million increase in labor costs over the prior year, including additional COVID-19 cleaning efforts.

BART’s failure to cut operating expenses will continue to worsen its grave financial condition and cause irreparable harm to the long-term sustainability of the system.  The new reality of public transit demands a re-evaluation of the agency’s mission, including the size and expense of its workforce during a period when rider demand is greatly diminished.

Debora Allen is a BART director representing District 1, which stretches through central Contra Costa County from Martinez to San Ramon.