As fewer riders use transit during COVID-19, RTD feels financial impacts

While government agencies and institutions work tirelessly to help Coloradans through these difficult times, RTD’s main priority during the COVID-19 crisis is to keep employees, riders and the general public as safe as possible.  

Meanwhile, the rapidly unfolding societal shutdowns related to COVID-19 are deeply impacting RTD’s finances. As a result, the agency is initiating plans to recover as quickly as possible.

RTD, the American Public Transportation Association (APTA) and many allies have called on the federal government to include mass transit in revenue-replacement and recovery funds. Last week, RTD sent a letter to Colorado’s congressional delegation encouraging its members to support and pass a stimulus bill that will include money for transit, an essential service for many people throughout our metro community. As of this writing, the Senate is debating he Coronavirus Aid, Relief, and Economic Security (CARES) Act. This bill includes $20 billion for mass transit -- $16 billion for urban areas and $4 billion for rural communities. Once the Senate passes the bill—which, hopefully, will be today—the House may approve it by “unanimous consent,” which means House members will not have to fly to Washington to vote on it. 

RTD has already felt the severe economic impacts of the stay-at-home philosophy, underlined by direct orders from Gov. Jared Polis. Ridership on RTD buses and trains is down 70 percent over last year at this time, with paratransit requests down even more.  

While RTD has several funding sources, a large portion of RTD’s budget comes from sales and use tax  and a smaller portion from fares. Sales taxes will suffer greatly with the shuttering of restaurants, bars, retail outlets and ticketed events. Consequently, the state is predicting a $750 million gap in next year’s budget.  

“The issues, though, are far from unique to RTD and municipal transit,” said Todd L. Ely, Ph.D., associate professor at the University of Colorado Denver School of Public Affairs, and director of the Center for Local Government Research and Training.  

APTA’s call for federal help anticipates a likely $14 billion drop nationally in sales taxes and fare revenues for metro transit. Additionally, another $2 billion will be needed to cover direct costs for virus-related upgraded cleaning.   

“Federal dollars would clearly be welcome and could smooth current shortfalls,” Ely said. He added that after the 2008 Great Recession, RTD “used federal American Recovery and Reinvestment Act funds for both operations and capital spending.” 

Not all administrations or sessions of Congress have held the same attitude as 2008 to 2010 on the value of public transit and what the federal role should be. Some economists are calling the COVID-19 impact a “service recession,” with a brutal impact on the kind of lower-wage retail jobs that people need to pay everyday bills.  

“At this moment, no one really knows how long the COVID-19 crisis will last, or the extent of the social and economic impacts,” said Pauletta Tonilas, RTD’s assistant general manager of communications. “We continue to be nimble as we evaluate our overall operation and make adjustments as necessary because the only thing we know for sure is that things will continue to change and we must change with them.”