The San Francisco Municipal Transportation Agency is not facing a financial crisis, or at least not yet, according to a report from the city Controller’s Office that shows the agency is projecting a better than expected budget forecast compared to the one projected by transit officials.
SFMTA officials earlier in the year had projected budget deficits over the next five fiscal years totaling $646 million. Now, the updated budget forecast shows some projected deficits will no longer exist and will shrink in future projections. The report, released last week, is now projecting the budget deficit to total $123 million over the next five fiscal years.
The new, more positive budget outlook is thanks in part to reduced pension costs, federal funding awarded to the agency to help aid in the recovery during the pandemic, and updated projections from The City’s general fund, which makes up a large chunk of the agency’s budget. The Mayor’s Office this month said The City is projecting a budget surplus over the next two years — a first for The City since 1998.
SFMTA spokesperson Erica Kato said the positive budget outlook will give the agency more time to come up with stable funding resources and also credited the agency’s efforts in being “prudent” in spending the federal relief dollars:
These efforts helped us overcome our short-term budget shortfall, which means we have a little more time than we thought we’d have to come up with new funding sources.”
City officials have debated over the last year on how fast the agency should spend federal funding restoring Muni service to pre-pandemic levels. The agency plans to restore about 85 percent of scheduled service hours by June 2022, which the SFMTA Board of Directors approved earlier this month.
Supervisor Dean Preston – who has been one of the SFMTA’s critics for not restoring Muni service more quickly and criticized the agency early on for not having a plan on when Muni service would be restored – said in a statement that the agency is no longer facing a budget disaster:
We’ve stood with riders, workers, and transit advocates demanding full service restoration, fare relief, and an end to austerity transit planning. This report further supports our demands. It’s time to stop talking about tradeoffs and start delivering on a bold vision for public transit.”
Despite the good news in the short term, the SFMTA still faces a structural budget deficit, but at a later point in time. The controller’s report projects that the budget shortfall will begin in the 2024-2025 fiscal year and continue approximately at $25 million to $55 million a year. The projected deficits do not include the agency’s capital and maintenance funding needs, Kato said.
Staffing will be a primary constraint for restoring Muni service over the next two years and not funding.
The SFMTA has over a 20 percent vacancy rate in recent months in transit positions, including operators, planners and maintenance, the report said. The agency would be short 300 operators if the agency were running at 2019 Muni service levels.
Several recommendations were made by the controller’s office, including developing a multi-year financial and service plan built around the controller’s report base estimate, with contingency plans if the situation improves or worsens. The report also says the SFMTA should accelerate its hiring process of operators and critical positions “to the extent possible.”
While the report projects a much later budget deficit for the SFMTA, the report said strategies that the SFMTA board, the mayor and Board of Supervisors come up with will be key to closing future budget gaps as well funding needs for maintenance and capital improvements.
Mayor London Breed last week introduced a $400 million bond measure that is aimed to help the SFMTA make upgrades to bus facilities as well as make infrastructure improvements in the subway. The measure could go before voters on the June 2022 ballot.
Jerold serves as a reporter and San Francisco Bureau Chief for SFBay covering transportation and occasionally City Hall and the Mayor's Office in San Francisco. His work on transportation has been recognized by the San Francisco Press Club. Born and raised in San Francisco, he graduated from San Francisco State University with a degree in journalism. Jerold previously wrote for the San Francisco Public Press, a nonprofit, noncommercial news organization. When not reporting, you can find Jerold taking Muni to check out new places to eat in the city.
