WHEN the Covid-19 pandemic struck, passenger rail and transit ridership plummeted in the United States, mirroring the situation around the world. Transit authorities responded by cutting services, leading ridership to decrease further. Five years later and ridership and revenue in most cities have not yet recovered to pre-pandemic levels. And with the costs of providing service continuing to rise, many cities and transit providers across the United States are struggling to get the numbers to add up.
Initially the federal government stepped in to help. Usually, federal funding for US transit is limited to grants and special loans for capital projects. However, under Covid relief legislation that came into effect in late 2020 and early 2021, federal grants were provided to help transit providers to maintain operations. This Covid relief funding was always designed to be temporary, and now nearly six years since the first cheques arrived, the money has finally run out. Transit agencies across the US are now seeking new sources of funding for existing operations and many are struggling, with some proposals calling for service level cuts of 35% or more and huge reductions in staff.
Almost all transit in the United States is operated by public-sector agencies. They are funded by farebox revenue, which typically accounts for 30-50% of the operating budget, and state or local governments, mostly through state or local taxes.
In a study for a series of Railway Age articles published in the summer of 2024, we analysed major transit systems and how they were faring when it came to new funding sources. We found that, in some cases, states had stepped up by enacting new funding legislation for transit agencies, although it remains unclear how long these programmes will be able to keep services going at, or close to, pre-Covid levels, as these reprieves are subject to renewal.
This is a more positive picture than in other locations where there has not been significant improvement in the funding picture, and where operators, including in some of the country’s biggest cities, are still warning of severe cuts.
Reprieve for some
New York’s Metropolitan Transportation Authority (MTA) runs the largest system in the US by far, accounting for nearly 40% of the country’s transit passengers. It operates New York City Transit, including the New York City Subway, the Long Island Rail Road, and Metro-North. With newly-enacted levies, which provided $US 6.7bn for fiscal year 2025, it appears that New York transit will remain at current levels until 2029. In addition, in 2025 MTA received $US 562m from a new congestion charge for road vehicles south of Central Park in Manhattan. Similarly in New Jersey, a surcharge on state taxes for the largest corporations has raised an additional $US 1.5bn and will keep New Jersey Transit going at or near current levels through 2028.
Chicagoland’s transit will also be maintained under recent state legislation that will bring new dedicated funding for transit operations, estimated at $US 1.5bn per year, of which 90% will go to transit in the Chicago area. The same Illinois statute reorganised and regionalised Chicago city and suburban transit governance. While the new board has yet to take office, supporters of the plan are optimistic that a strong regional governing body will improve efficiency in administering transit in the region, planning fares and levels of service, and improving coordination between the Chicago Transit Authority (CTA), which oversees city transit, regional rail operator, Metra, and Pace which runs suburban buses.
The picture in Seattle seems positive for the moment, but a sales tax provision that supports transit to the tune of $US 50m per year is set to expire next year, and it will be left to voters to decide whether they accept a replacement at double the current rate.
Passenger rail in the United States is likely to continue on its current path of passing from one reprieve to another.
In other cities, where the situation is not so severe, transit keeps going under new budgets that call for slight service reductions. These places include Portland, Oregon, Denver, and the Washington, DC, area.
In other places, money might soon run out. A surcharge on income on people earning more than $US 1m per year has kept transit afloat in Boston and elsewhere in Massachusetts, and Philip Eng, head of the Massachusetts Bay Transportation Authority (MBTA), has received high marks for his performance. Still, there is growing concern that the agency will face a sizeable deficit next year due to declining ridership, high operating costs, a limited and unreliable income stream from state sales taxes, and continuing debt service on old projects. The most notorious of these is the Big Dig road project connecting the north and south sides of the city that opened in 2007.
Photo: Shutterstock/Fernando Garcia
Pennsylvania gave its transit a two-year reprieve in 2025. Republicans in the state Senate objected to finding new funding sources for transit, leading state governor, Josh Shapiro, to transfer money assigned for capital projects to the operations budget, a move that imparts long-term risk, but keeps services going in the meantime. Yet with this funding running out at the end of this year, some more fiscal flexibility may be required. Transit’s prospects in the state is seemingly riding on the outcome of state elections in November. If Democrats win, the picture could improve. A Republican victory could spell further trouble.
In California, transit in San Diego, Los Angeles and San Francisco Bay is getting by for now, but could face the fiscal cliff again soon. For example, while the San Francisco Bay area is one of the most transit-rich in the US, ridership has not recovered since the pandemic due to the rise of remote working. Bay Area Rapid Transit (Bart), which runs metro services between San Francisco and other locations to the south and in the East Bay, has been hit especially hard. To cope, Bart is considering a 60% cut in service and ending operations at 21.00. Caltrain, which runs regional trains south of San Francisco, is also considering ending service at 21.00, eliminating weekend trains, and running trains only once an hour on weekdays.
Meanwhile, the financial picture in San Diego is looking better. The local transit authority has approved a budget for the next fiscal year that will keep service at current levels.
Politics, as usual
As is the case in many parts of the world, in the United States politics essentially decides where and how much transit runs. Federal grants for capital projects relieve some of the pressure on state and local governments seeking to expand networks, but the operating side is strictly local, meaning every agency’s story is unique and focused on local issues and peculiarities.
In general, Democrats are more supportive of transit and passenger trains in the United States than Republicans and the Midterm elections in November could end Republican’s current stranglehold over the three branches of the federal government, offering some hope that the situation for transit at the national level might change.
At the state level, Democrats tend to be strong in transit-rich states. But, as it is in Washington, transit is rarely a political priority, meaning that passenger rail in the United States is likely to continue on its current path of passing from one reprieve to another, with no significant improvements in budgets or service likely in the foreseeable future, and the threat of severe cuts to service never too far away in some areas.
David Peter Alan is a contributing editor to IRJ’s US sister publication, Railway Age.
