SFMTA announces chances to service cuts, rise in layoffs due to budget impacts from COVID-19

The San Francisco Municipal Transportation Agency (SFMTA) says its projecting the need for substantial service cuts and layoffs to make up for the projected revenue losses of $607 million.

SFMTA says these cuts will be painful and difficult both for the people of San Francisco and employees. SFMTA will continue to work with elected leaders and has reached out to President-elect Biden’s transition team as well to repeat the calls from across the industry for the urgent need to secure federal support for the nation’s transit systems.

Federal CARES Act funding helped to replace hundreds of millions of dollars of lost revenue but was not enough. SFMTA is currently projecting that the pandemic will cause a loss of $607 million in revenue through June 2023, even after spending CARES Act funds.  If the SFMTA had not received these funds, more drastic measures would have been necessary earlier on in the pandemic. In addition, service reductions and layoffs would have occurred already. By the end of the month, SFMTA will have spent all the CARES funding, keeping workers employed and core service running to support essential workers across the city.

To make up for lost revenue, SFMTA says it must cut spending even further. Forecasts indicate the need for layoffs of between 989 to 1,226 full-time positions, or up to 22 percent of the workforce to close the Fiscal Year (FY) 2022 projected deficit. Every employee that SFMTA is forced to layoff hurts its ability to provide services. SFMTA says it depends on each of its employees to provide transit, street safety and other services on which the public relies.

SFMTA says it does not know exactly how these cuts will be spread throughout the agency, but it does know that these cuts will hurt all San Franciscans. Cuts could include:

Combined with previous service reductions earlier this year, SFMTA might only be able to operate about 35 percent of the pre-pandemic service.

When schools reopen, SFMTA may lack the funding to pay for crossing guards and other school safety programs.

Discontinuing the Essential Trip Card program, a discount program that helps seniors and people with disabilities pay for essential trips in a taxi when many people lost access to their local bus service.

 In addition to the revenue loss SFMTA is currently projecting, there is even further potential risk to revenues. It is possible that over the current two-year budget period, there could be additional financial risks to the budget. If revenues come in below projections, the situation may be even worse.  

Given these revenue losses, SFMTA says it is working hard to save money. It has cut overtime spending by 48 percent compared to last fiscal year. It instituted a hiring freeze for all but the most mission-critical positions. Combined with other fiscal controls, the SFMTA has found $118 million in cost reductions this fiscal year. The majority of those reductions have been in non-labor costs. Finding additional reductions without reducing labor costs will be increasingly difficult as SFMTA cannot put off purchasing critical supplies --like parts --while still providing services.

SFMTA says it cannot survive without new funding and will be looking for different ways to secure additional local revenue.  It is considering a wide variety of options to supplement revenues, including a general obligation bond, a community facilities district and reauthorization of the Prop K sales tax.