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State Senate Misses Another Bus

Continued budget reductions, federal delays threaten local transit

June 23, 2005 | By Charlene Crowell
Great Lakes Bulletin News Service

MLUI/Bruce Giffin

Grand Rapids’ bus system recently opened a new downtown bus terminal as part of its ongoing, voter-supported, regional expansion.

LANSING — Reeling from repeated cuts to state support of local transit systems — and the almost two years of federal funding delays that are amplifying their effect — public transportation officials in Michigan are urging the Legislature to reverse course this year.

The officials say three straight years of cuts are seriously damaging many bus systems around the state, even as ridership and voter approval of local taxes to finance better service continue to surge. From tiny rural systems in the far north, such as Gogebic County’s, to much larger urban ones at the other end of the state, such as Grand Rapids’ regional authority, agencies have expanded routes in recent years in response to that strong support and watched with satisfaction as more people began taking the bus more often. 

But many Michigan lawmakers and their federal counterparts are refusing to get on board. Two weeks ago, on a party-line vote, the state’s Republican-led House, using unprecedented and highly controversial procedural tactics, approved an omnibus state budget literally before citizens had a chance to inspect it. The bill retained Governor Jennifer M. Granholm’s proposed $10 million reversal of last year’s transit budget cuts. But five days later, on June 15, the Republican-led state Senate approved a transportation budget on a 35-3 vote that rejected her proposed restoration.

Transit officials say that the $10 million budget restoration the House approved is not enough to fix the problem. But the Senate’s rejection of it will be difficult to reverse, and cuts could actually continue for several more years. One reason is the state’s now-annual billion-dollar deficits, which have led to the slashing of many state departmental budgets. Another is State Senator Shirley Johnson (R-Royal Oak), who chairs the appropriations and transportation appropriations committees. Senator Johnson strongly and routinely criticizes transit funding, particularly in southeast Michigan.

Transit officials and public transportation advocates promptly spoke out against the Senate action, saying it will lead to more service reductions. They also pointed out that cutting the state’s transit budget leaves millions of federal dollars on the table that are not only crucial to local bus companies but would also inject some badly needed revenue into Michigan’s job-starved economy. Some officials and advocates are now saying that unless the state reverses what would be the fourth straight year of transit cuts — and unless Congress acts on its own long-delayed, five-year, national transportation bill — many Michigan bus systems could begin a downward spiral that would become difficult, if not impossible, to reverse.

“Rising costs for fuel, health care, and maintenance have made it difficult for agencies to provide quality service,” said Todd Tennis, co-convener of the Let's Get Moving Coalition, which links transit operators, union members, and disability advocates in efforts to gain better funding for public transportation. “The problem has become so dire in some areas that transit agencies may be forced to close their doors.”

Not Just a Theory
Manistee County Transportation may already be experiencing the kind of downward spiral transit officials say they fear. According to General Manager Dick Strevey, annual ridership on MCT, a largely rural system in northwestern Lower Michigan that boasts one of the state’s oldest Dial-A-Ride services, peaked in 2000 at 350,000 trips. That year MCT employed 35 people, including 23 full-time drivers.

But state cuts in 2002 and 2003 triggered service cuts, which in turn triggered sharp falls in ridership. With fewer people able to use the reduced service, county residents’ longtime support for the system evaporated last August when voters turned down a MCT millage request. That was the only voter defeat of a transit millage in the entire state that year; 13 other communities all approved transit millage renewals or increases, often by near-landslide margins.

Now, with fewer service days, sharply limited hours, and a fare increase, Mr. Strevey predicts that MCT’s annual ridership will drop precipitously, perhaps by as much as two thirds from its peak, to about 140,000 trips. He has already cut staff by more than 40 percent, to 20 people, including 12 drivers.

“Right now, we’re just doing what we can when we can,” Mr. Strevey said. “We hope that somewhere there’s a light at the end of the tunnel; we just haven’t seen it yet.”

Triple Play
Further dimming the light Mr. Strevey is looking for are the ties between state and federal funding of local bus systems. Those links make Michigan’s transit cuts and Congressional inaction on federal transportation funding triply important to people like Mr. Strevey.

First, because federal capital improvement funds for bus systems cannot be released without enacting a permanent bill, delays like the one currently underway in Washington often force local systems to dip into operating costs to handle expenses the federal government usually covers.

Second, those delays also cost the state, and systems like Mr. Strevey’s, large amounts of federal money. The Michigan Department of Transportation estimates that each day that transportation funds are calculated — but not actually paid out under the old, temporarily extended, less- generous federal funding formulas — Michigan loses approximately $940,000. MDOT calculates that, since September 30, 2003, when the previous federal transportation bill expired and temporary appropriations extensions began (there have been seven of them so far), Michigan has lost $595 million that could have supported its transit systems, road repairs, and critical bridges.

Third, some state transit cuts also reduce federal matching funds, often by four-to-one ratios. That is one reason that the state Senate’s latest reductions in bus system support drew a strong reaction from Peter Varga, president of the Michigan Public Transit Association and executive director of the Interurban Transit Partnership, the Grand Rapids region’s steadily expanding bus system.

“The Senate’s proposal cuts $7 million out of the bus capital line item,” Mr. Varga told the Great Lakes Bulletin News Service, offering one example. “These funds, budgeted by the governor at $18.8 million for 2006, were already well below the actual amount of state money needed to match federal dollars. More than $30 million is needed to adequately match and secure all federal transit money that is anticipated to be available in 2006. With this budget, we will only be securing about one-third of the federal money that is on the table.”

“Federal dollars are appropriated at 80 percent, with the state historically providing the 20 percent match to secure the federal money,” he said. “Without adequate state funding, the federal money will be put in jeopardy. This is funding which our Congressional delegation, Republicans and Democrats alike, are fighting hard to secure.”

A Long, Slow Slide
But many Lansing lawmakers seem indifferent to that opportunity. State Representative Shelley Goodman Taub, the chair of the House Transportation Appropriations Sub-Committee, indicated that support in the Republican-controlled state Legislature for public transit is not strong.

“Most of us are pretty independent people,” Representative Taub, who voted for her party’s omnibus funding bill, said. “This [transit service] is another example of how locals government and the people it serves decide what is important to them and how to pay for it. The state can’t do everything. There has to be some kind of combination of things when it comes to transportation.”

Exactly what combination Representative Taub and her colleagues envision for public transportation worries transit advocates in Lansing. In the current combination, rural local bus systems in Michigan receive about half of their money from fare boxes and local property tax or other municipal revenues, about 38 percent from the state, and 11 percent from the federal government. Urban systems generally see the same federal support, somewhat less state support, and depend more on local fare and tax revenues.

But in the 2004 and 2005, state lawmakers and the governor, faced with huge and largely unanticipated budget deficits, trimmed Michigan’s Comprehensive Transportation Fund, which helps fund bus systems around the state, by a total of $41 million, and also cut $2 million in previously approved money for the Passenger Transportation Division of MDOT, which supports local transit agencies, eliminating 11 full-time positions.

The pattern began in 1992, when for two consecutive years former Republican Governor John Engler issued executive orders shifting a total of $20.8 million from transit funding to the general fund. Five years later, in 1998, he shifted an additional $25 million from transit to state highways. Other legislation and executive orders between 2002 and 2005 cut an additional $53.9 million. Since 2003, the annual state budget for local public transportation has fallen by more than 15 percent, a reduction whose effect increases as fuel, labor costs, and demand for transit services grow.

Here Comes Trouble
Clark Harder, who directs the Michigan Public Transit Association, a non-profit group of transit agencies that advocates for its members in Lansing, recently warned Representative Taub’s committee that the toll from the state’s long history of transit cuts is already serious and will increase until cuts are reversed.

“Over the past 12 years,” Mr. Harder said, “Michigan public transportation systems, through transfers from the Comprehensive Transit Fund, have contributed over $100 million to other state needs. We have felt and shared in the state’s pain; and these transfers have left our local bus operations hurting. Next year, without significant structural funding improvements, we will see another dozen or more systems facing significant financial hardship.” 

Kara Derrickson, general manager of the Branch Area Transit Authority (BATA), which serves Coldwater, agrees. She said that her bus system is being squeezed from two directions: Budget cuts and demands for more service.

“With so many budget cuts, and cutting positions at MDOT, we don’t have the MDOT support that we used to have,” said Ms. Derrickson. “Nor do we have the dollars. We are a rural area and there are many, many people that rely on our service every day. We serve a widely growing senior population. Our wheelchair bound clientele are also growing. All of these people lack any other transportation resource without BATA.”

Larger, urban-based transit systems are also suffering from state funding cuts. Sylvester Payne, general manager for Saginaw Transit Regional Authority Services, oversees an eight-route, 54-vehicles system that runs six days a week from 6:00 a.m. until 7:00 p.m. and served just over a million riders in 2003. But, following state funding cuts in 2003, STARS, like the Manistee system, cut routes and service. In 2004 ridership fell by about 20 percent.

Unlike Manistee voters, Saginaw’s recently approved a three-mill property tax increase, in February of this year, in order to add about $1.8 million back into the system’s budget and restore some service cuts. Mr. Payne said what happened in Saginaw is part of a troubling pattern that is evident across Michigan, one that sets the state Legislature at odds with the citizens it represents.

“Local support across the state has continuously been there,” he said. “It’s now time for the state to do its fair share. We cannot afford further cuts from the state.”

But MDOT Director Gloria Jeff said more state support is doubtful. 

“Governor Granholm has proposed restoring $10 million in transit funding,” observed Director Jeff. “While the process is still underway, it does not appear that current legislative budget proposals include the $10 million in transit funding that the governor wants to restore.”

Transit advocates like the ‘Let’s Get Moving’ Coalition’s Mr. Tennis are not about to give up, however.

“Unless public transit advocates, managers, and, most importantly, users step up and make a lot of noise,” he said, “policy makers in Lansing will continue to ignore the needs of public transportation. Until the public demands better public transportation, they will continue to allow it to wither on the vine.”

Charlene Crowell, a journalist,  is the Michigan Land Use Institute's policy specialist in Lansing. Write her at charlene@mlui.org.

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