RTD faces new budget crisis that jeopardizes plan to restore service

Metro Denver’s transit system will take years to recover from recent pandemic-induced bus and train service cuts if new RTD revenue projections — which forecast a $252 million shortfall next year — are accurate.

Based on a steep drop in projected 2021 revenue compared to a pre-coronavirus budget forecast, the shortfall would amount to roughly 30% of the Regional Transportation District’s operating budget. And that’s just the beginning of years of predicted fiscal pain.

Driven by a new normal — fiscal analysts project the sales tax revenue RTD depends on won’t rebound to pre-coronavirus levels for years — the agency foresees a cumulative $1.3 billion hole in its finances through 2026.

“We are looking at the budget very carefully, and it really is daunting,” RTD Board Chair Angie Rivera-Malpiede said Wednesday, referring to the tax projections. “This is a long-term issue that we need to look at — not just as the RTD Board of Directors but for the entire region, to ensure that we have this mass transit program that serves the whole community.”

Rivera-Malpiede spoke during a video news conference in which Gov. Jared Polis and state legislative leaders announced the formation of an outside advisory committee. The RTD Accountability Committee, rooted in legislative discussions about agency reforms that were shelved amid the pandemic, will scrutinize RTD’s finances, operations, services, rider equity issues and even its elected governance structure, among other items, and make recommendations in the next year.

RTD’s elected board, briefed this week on the budget forecast, is early in discussions about potential cuts to close next year’s large gap.

Options include more furlough days for nonunion employees, who already are taking several this year, a continued hiring freeze and other across-the-board trims to expenses. But bus and train frequencies and routes are likely an unavoidable part of the discussion.

RTD was largely sheltered from a severe budget hit this year by federal pandemic aid. It’s been approved for up to $232 million in reimbursement for immediate expenses and negative effects from the coronavirus.

But its budget projections assume such robust aid won’t be available for transit agencies next year.

While state and local governments across the board are contending with tighter budget forecasts in the pandemic-induced recession, RTD long has been in a fiscal vice. It’s one borne of many issues, including both higher-than-expected costs and lower-than-expected sales tax proceeds in the 2004 voter-approved FasTracks expansion program.

“The truth is, RTD has never been able to fully catch up from the last recession that we had,” state Rep. Matt Gray, who chairs the House’s transportation committee, said during the news conference.

The agency’s leaders started the year hoping to modernize RTD’s mission and fine-tune service as part of the Reimagine RTD planning process, with modest cuts seen as likely.

Then the pandemic hit Colorado — sending both ridership and tax revenue plummeting in March amid stay-at-home orders and other restrictions.

Daily ridership was 73% lower than normal by late April, according to RTD figures. Ridership has recovered a little bit since but remained down 61% as of June 2.

In response, the RTD board approved unprecedented service reductions that, beginning April 19, curtailed service by about 40%. The result for most routes was weekend levels of service, with a handful suspended.

The changes were supposed to be temporary, with service levels restored later this year to a new baseline established March 24 that included less-severe cuts intended to weather an operator shortage.

Now that’s in question. Even if ridership recovers, RTD must grapple both with its new budgetary constraints and the new reality of reduced capacities aboard buses and trains to maintain social distancing.

“We recognize that we are going into a situation where things are going to be very different, and we want to make sure that we will be able to provide the kind of service that our customers need, while being mindful with the limitations we have with the budget,” RTD spokesperson Tina Jaquez said. “And we have to keep in mind the need for social distancing in the future.”

This week, RTD reduced light-rail trains to two cars because of the anemic ridership, spurring at least one complaint from a commuter who expressed concern to RTD officials and The Denver Post about what she observed to be cramped conditions on several trains. Jaquez said RTD is monitoring train lines to decide when to add more cars.

Earlier this year, RTD officials resisted legislative calls for accountability and more scrutiny for the agency. But Wednesday, Rivera-Malpiede expressed optimism that the new committee — which will include transit advocates and local officials around the region — will provide a welcome set of fresh eyes for its budget woes.

“This timing … could not be better for this committee to come together,” she said.

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