America’s public transit doesn’t just need a one-time bailout – it needs consistent federal funding.

Chris Arvin
7 min readMar 26, 2020

A brief history of how U.S. transit agencies used to receive significantly more support from the federal government.

A public bus drives down Masonic Avenue in San Francisco with no passengers

In the spring of 1981, transit-dependent residents of Birmingham, Alabama suddenly found themselves riding to work on old school buses driven by volunteers. Their local transit agency had shut down the entire bus system, acting preemptively in the face of an upcoming deficit. A makeshift transit system, paid for by church donations, had been created to pick up the slack.

“We don’t have a choice. We’ve got to get to work,” a local worker told Knight news service.

For riders, the shutdown of their transit system was a burden and a disruption. For transit experts, it was a dire warning sign of what could come: “When you take away federal operating assistance, you just might doom some of these big systems that have depended on that money for years,” said a representative for the American Public Transit Association.

Transit funding cuts of the Reagan era

A sampling of news headlines from the 1980s.

The warnings were felt across the country. Newly-inaugurated President Reagan had indicated that by the end of his first term, he wanted to entirely phase out federal operating assistance — a subsidy provided by the federal government to transit agencies on an annual basis. Unlike capital funding, which goes towards expenses like buying new buses or extending a rail line, operating assistance is strictly meant to help cities pay for the day-to-day costs of operating public transit.

Reagan never fully ended federal operating assistance, but he did slash funding for it by a significant amount that hurt transit service all over the country. The administration’s attitude towards public transit was similar to its attitude towards welfare programs: weaken social safety nets, and you force people — or in this case, transit agencies — to become self-sufficient.

Over sixteen years, federal spending on subsidizing transit operations fell 45%, from about $1.1 billion in 1980 to just under $600 million in 1996; this all happened alongside inflation and rising transit operating costs.

How much of the public transit funding gap did the
federal government cover in 1978 vs. today?

The transit funding “gap” is the annual operating cost a transit agency still has left to pay after using the year’s revenue (i.e., fares). Without federal funding, states and cities are left to pay the rest.

Sources: National Urban Mass Transportation Statistics — 1979, NTD Profiles at

Less transit service, higher fares

By the end of the second Reagan term, agencies like San Francisco’s Muni were simultaneously raising fares and cutting service. The cost of operating transit was increasing while the subsidies from the federal government were decreasing. In 1988, for example, Muni reduced service on 23 lines at once. Some lines were removed entirely, some had their hours cut, and some received longer wait times.

Many Muni lines’ wait times increased since 1981. In the AM peak period, for example, the 19 Polk went from 8 to 15 minutes.

The San Francisco Chronicle joined local transit rider Michele Uzeta for her last ride on the 13 Guerrero, one of the lines that was being cut. She was losing direct access to her job downtown from her home in the Noe Valley neighborhood. She would make do, she said, by using a less direct bus line and then transferring to the underground BART train.

“I don’t like it, but what can you do,” she told the newspaper. Meanwhile, the cost of her bus ride had gone from $0.50 to $0.85 — a 70% increase — in just six years.

Muni’s manager at the time, William Stead, told riders that the service cuts would mean waiting “an extra five minutes and traveling on a crowded bus…but you’ll still get there.” The service cuts were justified, he said, because keeping service would mean raising fares to $1.00, a price that riders would “balk at.” In today’s dollars, adjusting for inflation, that would be $2.19 a ride. The actual fare today is $2.50, and Muni is currently proposing an increase to $2.75.

Muni fares have massively outpaced inflation since 1975.
Calculated with Bay Area CPI. View sources

When the first of the 1980s’ Muni fare increases started, local transit officials were clear about why they were happening: “Besides increased fuel and labor costs since the last fare hike, [Muni spokesman] Levin said Muni faces the loss of $12 million in federal operating assistance because of President Reagan’s budget cuts,” reported the San Francisco Examiner.

(At the same time, California’s publicly-funded services were still reeling from the passage of Proposition 13, which lowered property taxes and decreased the amount of new funding available for services like Muni.)

Years earlier, in 1978, the federal government and transit had a different relationship. In 1974, the White House and Congress had begun helping transit agencies cover the costs that they couldn’t pay with fare revenue. Within a few years, the federal government was providing San Francisco’s Muni with over 13% of the subsidy it needed to pay for operations. In fiscal year 2018, the federal government only reimbursed Muni 1% of its subsidy.

Chart: San Francisco Muni’s Share of Transit Subsidy Paid for by Federal Government over time.
Sources: City of San Francisco Annual Reports, American Public Transit Association, and

How a crisis prompted federal investment in transit

In the early 1970s, a gas station is closed due to a gasoline shortage. Source: National Archives

Federal transit operating subsidies were started, perhaps surprisingly, by Republican president Richard Nixon. At the time, transit ridership had just turned around from a period of deep ridership decline that started after World War II. Facing an unprecedented energy shortage and an American public starting to be concerned about the environment and the cost of oil, Nixon was open to investing in alternate options to cars. Public transit became prominent enough in Nixon’s plans that he even mentioned the new subsidies in his 1974 State of the Union.

“…the energy crisis has given new urgency to the need to improve public transportation,” he proclaimed. “The program I have proposed this year…will mark the strongest federal commitment ever to the improvement of mass transit as an essential element of the improvement of life in our towns and cities.”

Nixon acknowledged the impact of public transportation on our environment as well. In an address announcing this policy, he cited the “effects of our transportation systems on our environment,” and added: “we must now give equal attention to the need for energy conservation.”

In November of 1974, the National Mass Transportation Assistance Act was signed by President Gerald Ford, who called the subsidies a “long-term and vital major Federal commitment to mass transportation.” They were continued by the next President, Jimmy Carter. But just like Ronald Reagan famously removed solar panels from the roof of the White House, he started to cut the subsidies as well, a trend that continued during the first George Bush presidency.

It’s not just COVID-19

As of this writing, we are facing a crisis that is severely impacting public transit. The COVID-19 virus has prompted cities to keep citizens indoors as much as possible. Transit ridership is plummeting, with agencies like BART reporting that over 90% their usual ridership is not using the service.

With this ridership drop comes a terrifying decrease in revenue for transit agencies. San Francisco’s Muni is losing $1 million a week, and the New York MTA estimated that it could lose $3.7 billion dollars if these conditions continue.

The problem isn’t just this recent crisis, though: COVID-19 has simply shined more light on a system that isn’t set up to succeed. Agencies that were already hanging on a thread financially are finding that thread unraveling. Some still haven’t fully recovered from service cuts prompted by the 2008 recession. When agencies are forced to rely more and more on fare revenue to pay for operations, sudden drops in ridership have harsh impacts on service. And in places like California, a fair share of the left side of the political spectrum seems to agree that transit relying on fare revenue is a bad practice: some simply want more tax support, like Senator Scott Wiener, while others are in support of fare-free transit, like BART board director Janice Li.

A current proposal in the U.S. Senate’s COVID-19 response bill provides $25 billion in relief for public transit. It is a figure agencies had hoped for, and a great start to save transit agencies from the impact of this epidemic. But, as experts note, it won’t be enough to prevent long-term damage from happening. And even if it were: simply going back to where we were before this crisis isn’t doing enough.

There are an abundance of reasons to want public transit to succeed, all of them valid: creating mobility equity, saving the climate, reducing traffic congestion, decreasing the amount of traffic violence, improving the economy, and more. For all of these reasons, quality, affordable public transit is a necessity in cities. To provide transit agencies the opportunity to truly thrive, and to not be one crisis away from a transit nightmare, it is time that the federal government once again contributes to cities’ transit operating costs in a substantial, long-term way.