Funding eases painful Muni cuts 

Muni riders may be saved from reduced service because of an unexpected windfall in state funds.

One week after he refused to sign legislation that would have sent $146 million to Bay Area transit agencies, Gov. Arnold Schwarzenegger changed course and signed a bill that will provide state funding, a pot that had been slashed to nothing in recent years.

With the passage of the bill, the San Francisco Municipal Transportation Agency, which operates Muni, will receive $36 million. BART will take in $26 million and Caltrain $5 million.

The SFMTA recently closed a $12.2 million deficit for this fiscal year, in part by approving a 10 percent service reduction — planned for May — and by increasing Fast Pass prices for passengers using cable car and express buses.

The funds from the state are expected to be delivered in one lump sum June 22 and can be applied to either this fiscal year, which ends in June 30, or next fiscal year. 

“We have to talk to all our stakeholders, including the Board of Supervisors and the mayor, about how to use this money,” SFMTA Executive Director Nathaniel Ford said. “But the service reductions and fare increases were last resorts, so clearly they’re at the top of our list right now.”

Mayor Gavin Newsom said he wants the SFMTA to use the money to reverse its fare increases and offset the planned service reductions. The agency will present a list of recommendations for the funds at its board of directors meeting Tuesday.

The state funding also can be used to tackle the $56.4 million deficit the transit agency faces for next fiscal year, which begins July 1. To help make up that shortfall, the SFMTA is considering extending parking meter hours, increasing fares annually based on inflation, and labor concessions — proposals that are still on the table, Ford said.

The legislation approved late Monday night involved a complicated gas-tax swap that would increase diesel sales tax but offset that by lowering excise taxes. The proposal would have had a neutral effect for people paying at the pump, but the increase in sales tax would create $400 million in state transit funding. The governor initially balked at the plan, but agreed to sign it after it was clarified that certain subsets — such as diesel-dyed fuel and aviation gasoline — would be exempt from the increases.

The bill establishes a permanent state funding stream for transit agencies. In the 2011-12 fiscal year, which begins July 1, 2011, the SFMTA is slated to receive $31 million, BART $23 million and Caltrain $4.5 million.

State funding for transit agencies has fallen from $624 million in 2007 to zero in 2010. The SFMTA has lost $179 million in state funding during that time.

Although the agency still faces some tough choices, Ford is optimistic the new funding source will help restore or even enhance Muni service in the coming years, possibly as early as 2012.

“We still have some painful decisions ahead, but we’re in a lot better position now to plan for the future,” said Ford.

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