State Cuts to County Transit Go Deep

The cuts in transit aid to the Milwaukee County Transit System (MCTS) will have impacts that extend beyond the state biennial budget currently being deliberated.

Early in June, the state Legislature’s Joint Finance Committee voted to reduce transit funding to Milwaukee by $32.7 million over the next two years. The Republican committee members that voted for the cuts rationalized them by pointing to the millions in federal stimulus money that went to Milwaukee’s transit system.

The federal government provided one-time funding. Once that money is gone, there won’t be more. A recent report produced by the county’s budget office and Department of Transportation (MCDOT) says the proposed funding cut will limit the effectiveness of the stimulus funds, which the system planned to use on much needed capital costs and to cover revenue lost during the pandemic.

“It’s unfortunate,” said Donna Brown-Martin, director of the Milwaukee County Department of Transportation. “It inhibits our ability to meet both our operational needs as well as our capital needs, specifically.”

The director told the County Board’s Finance Committee during a meeting on June 17th that the system would make do with the funding it receives, but said, “it’s unfortunate that they thought this was something that was necessary.”

When ridership was decimated by the COVID-19 pandemic, so were farebox revenues. The report said ridership in May was still at 50% of pre-pandemic levels. Federal stimulus funds were used in 2020, and expected to be used again in 2021 to cover the lost revenue.

The state only provides transit operating revenue; it doesn’t provide funds for capital costs associated with purchasing new buses, or fixing and maintaining transit infrastructure. The $32.7 million cut proposed by the Republican-controlled committee is a cut to the funding for transit service.

If MCTS uses federal funds in the short term to cover the $32.7 million cut, that funding will need to be restored once the federal dollars are exhausted, or service will be cut for lack of funding.

MCTS was planning to use the federal dollars to maintain service despite low ridership and make capital investments. The federal funds were also, already, going to be used to defer a project operating deficit for the short term, the report notes. The state cut in transit aid means there is less money to do these things.

Joe Lamers, director of the Office of Performance, Strategy and Budget, said the cut to operating revenue during the next two years would affect the county’s plans to make much needed capital investments.

MCTS has approximately 233 buses that are expected to reach the end of their “useful life” by 2024, according to the report. Even if all those buses are replaced with the cheapest option, that being clean-diesel buses, that number corresponds to approximately $117 million in bus replacement costs by 2024, given that a diesel bus costs, on average, about $500,000.

That’s also just bus replacements. The transit system also faces capital costs to ongoing maintenance and infrastructure replacements at its facilities and garages.

The transit system, like the rest of county government agencies, was not flush with cash even before the pandemic. It only saw state funding increases twice since 2015, according to the report.

Supervisor Joe Czarnezki, who previously served in the state Legislature, noted that, given the way the state budgets, the cut could be permanent. If the cut is made to the base budget, he said, “that means in the next biennium that’s where we’re starting when the state begins budgeting.” He also said a cut like this will probably be drafted in a way that makes it veto proof.

“The majority party is smart enough to do that,” he said. “Our opponents, we may not agree with them, but they’re not stupid.”