In a recent interview on The Lars Larson Show, John Ley delved into the contrasting financial realities of two major Pacific Northwest transit agencies: C-Tran and TriMet. While C-Tran boasts an impressive financial surplus, with enough cash reserves to operate for nearly three years without taxpayer subsidies or passenger fares, TriMet faces a dire financial outlook. Over the next decade, TriMet is projected to burn through $1.1 billion in cash reserves, a situation that raises serious concerns about the sustainability of the agency.
Ley emphasized the broader implications of these financial situations, noting the national trend of declining transit ridership and rising operational costs—a phenomenon referred to as the “death spiral” by Charles Prestrud of the Washington Policy Center. Despite the influx of federal and state funds, transit agencies like TriMet are struggling to maintain operations as fewer people choose public transit for their daily commutes.
For those interested in a deeper dive, John Ley has shared his comprehensive talking points, which include additional insights not covered in the interview. These points provide further context on the financial conditions of both C-Tran and TriMet, as well as the broader issues facing public transit agencies across the country.
Read more about the financial state of TriMet and C-Tran here.
John’s Talking Points:
C-TRAN could operate for nearly three years without taxes or passenger fares using only their current cash reserves, whereas Portland’s TriMet will burn through nearly $1.1 billion of cash in the next decade.
Ridership at both agencies is well below pre pandemic levels. The Washington Policy Center’s Charles Prestrud recently talked about the “death spiral” transit agencies nationwide are in, as people refuse to use mass transit for their transportation needs.
C-TRAN has $423 million in assets on its balance sheet, up $62 million from a year earlier. This is up from $119 million a decade ago. Operating costs are $69 million a year, so they can keep running empty buses for a long time without needing taxpayer subsidies.
Portland’s TriMet expects to burn through nearly $1.1 billion of cash reserves over the next decade. A year ago, the projected cash burn was $485 million. The agency received $669 million in federal aid from 2020 through 2022, which it completely exhausted to forestall layoffs due to the pandemic.
The business model of transit agencies, especially TriMet, is to find new ways to get federal and state taxpayer dollars, to keep them alive a little longer. TriMet just spent roughly a quarter billion dollars extending their Red MAX light rail line 10 miles from Beaverton to Hillsboro. They bought 4 new light rail train cars to replace 30+ year old train cars as part of the project.
In the Interstate Bridge Replacement project, TriMet is demanding $2 billion taxpayer dollars for a 3-mile MAX light rail extension. They are demanding 19 new light rail cars to replace a similar number of 30 year old train cars. Note the difference – 4 train cars for a 10 mile extension versus 19 train cars for a 3 mile extension. What an outrageous boondoggle for taxpayers.
The FY2025 TriMet budget expects passenger fares to only cover 8.5 percent of operating expenses. “Passenger fares are down significantly compared to pre-pandemic levels by nearly 50 percent, which is a direct reflection of current ridership,” the report states.
C-TRAN passenger fares only cover 5 percent of operating costs for regular bus service. The sales tax area residents pay covers the other 95 percent of costs. In 2019, passenger fares covered 14 percent of costs. A decade ago, farebox recovery was 22.7 percent.
A decade ago, C-TRAN carried 24 passengers per hour of service. Today it is 15.6. Operating hours are up nearly 4.5 percent from 2014, while passenger boardings are down 30 percent. Passenger miles are down 52 percent.
Charles Prestrud of the Washington Policy Center recently discussed the national trend in declining ridership. “Transit ridership dropped sharply with the onset of the COVID pandemic in 2020,” he said. “The slow rebound in the years that followed has prompted discussion, sometimes in hushed tones, as to whether transit had entered a ‘death spiral.’”
Prestrud notes transit agency revenue in Washington state has increased substantially, from $2.15 billion in 2012 to $5.19 billion in 2022. Yet productivity has fallen. In 2012 bus service in Washington state averaged 31.4 passenger boardings per service hour, but by 2022 that had fallen to just 15.96 boardings per hour.
Prestrud notes: “These trends show that transit in Washington state is not in the typical ‘death spiral’ of decreased revenue leading to service cuts leading to lower ridership. Rather, the problem is that costs are spiraling up while productivity has been trending down.”
TriMet’s management is hiding another problem – employee pensions. Instead of trying to fully fund their pension obligation, management has a target to only fund pensions to an 80-90 percent level. One more indication of the death spiral at TriMet, as they fail to fully cover their obligations and costs.
Video Transcript:
Lars Larson
Welcome back to the Lars Larson Show, and welcome back to the Radio Northwest Network crew, where for the last 25 years or so, we’ve endeavored to serve the people of the Pacific Northwest with honestly provocative talk on a daily basis. And I want to talk about one of the dirty little secrets about government is that no matter how much money a government agency has in the bank, it will always ask for more.
Lars Larson
And what we should do as citizens is say, if you’ve already got that money and you’re not putting it to good use, then we’re not going to give you any more. And if you come for more, you better justify what you want to spend it on and why you’re asking for it. That would be my approach, and I suspect it may be similar to the approach of John Ley, retired airline pilot, reporter, and candidate for the Washington House of Reps, District 18, Position 2.
Lars Larson
John, welcome back.
John Ley
Hey, Lars. Happy Friday. Always happy to be on with you and your listeners.
Lars Larson
What do you think about the results of Tuesday’s primary?
John Ley
I was ecstatic with it. Basically, I got three times the number of votes as my Republican opponent. I was delighted overall in Washington State, and for our Clark County Republican Party-endorsed candidates, we did very well. So we’re looking forward to going forward to November and hopefully having an awful lot of wins in November, of course, including President Donald Trump.
Lars Larson
Yeah, President Donald Trump. Governor Dave Reichert would like to see Congressman Joe Kent. I’d like to see State Rep John Ley. So tell my audience what they ought to know, not just about what TriMet, the big transit agency for Portland, is doing—burning through $1 billion in the next decade—but what C-Tran is doing at the same time.
John Ley
So C-Tran recently released their annual report. I went through it and then decided to do a comparison with TriMet. C-Tran has so much cash in the bank that they could operate for three years without any taxes or passenger fares, just using their cash on hand. Unbelievable.
Lars Larson
They sound like the Harvard Endowment, you know, or Harvard wouldn’t even have to charge tuition. Except that C-Tran is not nearly as highly ranked as Harvard is. And I don’t think much of Harvard either. How do they explain having all this cash?
John Ley
Well, in a sense, they don’t. Other than when you dig into the details, both transit agencies at C-Tran in Clark County and TriMet in Portland have received a ton of cash from the federal government during the pandemic and both federal and state governments for various boondoggle projects over the years. And C-Tran has used that cash to add to their balance sheet.
John Ley
A decade ago, they had $119 million in assets on their books. And now they’ve got $423 million. And it’s like, how can you do that when your passenger fares only cover 5 to 15% of your operating costs? It’s unbelievable. And yet they’ve been able to add to the balance sheet, and they’ve got so much that they can keep running empty buses for a long, long time without needing any more taxpayer subsidies.
Lars Larson
See, and I wish at least an agency like that would start to say, hold on, we’ve got all this extra cash. I’m not saying reduce fares, because I know they might be inclined to do that, because I want to see the people who ride the buses pay a greater percentage. When you’ve got, you know, skin in the game, you tend to care about the kind of service you get when you’re not paying anything.
Lars Larson
You do not. And I know people who say, well, no, the bus is already too expensive, it’s already too expensive, and you’re not even paying 85% of the cost of operating it. And zero of the cost to buying the buses themselves. Is anybody on their board of directors questioning why they’re holding 4/10 of $1 billion?
John Ley
Absolutely not. In fact, they love to tout it. C-Tran has won awards from the federal government for being one of the best-operated transit agencies in the nation. And so they love to brag about the fact that their financial balance sheet is so healthy. But the honest answer to that is they’re getting it by that healthy balance sheet, because they’re picking people’s pockets from both the state and federal levels instead of more wisely using the buses.
John Ley
And the saddest part is that ridership is down. As you and I have talked about many, many times, comparing ridership before the pandemic, it’s down 30 to 50% at both agencies. And when you go back and look a decade or more ago, ridership is down 50% or more. And common sense people want to use their cars. And therefore, a delightful article by the Washington Policy Center’s Charles Prestrud recently labeled the death spiral in transit agencies nationwide.
John Ley
People are refusing to use mass transit for their mode of transportation.
Lars Larson
And by the way, let me throw another element into that. They’re refusing to use transit, which means in most cases, they’re opting for a car or a truck of their own. And the direct day-to-day cost of buying fuel is about 40% higher than it was three years ago. So even with much higher fuel costs, people are still saying, I ain’t taking the bus.
John Ley
Yeah. Exactly right. And in fact, Prestrud noted that, in spite of higher costs, not only for people choosing to use their cars, but that these transit agencies, their productivity is down. We’re paying more than ever on a per-passenger-carried basis. And yet the number of people they’re carrying is going down. In the state of Washington, the cost has gone from $2.1 billion in 2012 to $5.2 billion in 2022 for all of our transit agencies. And yet the number of people they carry on an hourly basis was 31 passengers per hour a decade ago, and it’s now just below 16 passengers an hour. And absolutely ridiculous to carry so few people for such an outrageous cost.
Lars Larson
Well, and by the way, John, one of the things I’d love to have you put to rest. We’ve mentioned it before, but I’d love you to put some numbers together. There’s this old meme that says, well, old dirty, stinky buses are better, because they carry a lot of people and the amount of pollution they put out and the amount of fuel they burn.
Lars Larson
Except they’re not taking into account modern automobiles that are as efficient as they’ve ever been in American history. And they are as low in pollution as they’ve ever been in American history. Even when you compare it that way, the transit agencies are usually not superior to, if you calculate it as passengers carried per pound of pollution, you know, you’d say, oh, no, transit is much better on pollution and fuel use.
Lars Larson
I don’t think that’s true anymore because of the efficiency of modern automobiles. The transit agencies don’t beat the average private car. So as far as I’m concerned, ditch the whole system. And if you have to subsidize Uber and Lyft for those people that actually need to get somewhere and rebuild a system that way and spend a lot less.
John Ley
That’s exactly right, buddy, and the easy example of that is that Washington State has eliminated their vehicle emission testing because cars are so clean, you know, they no longer do that, number one. And your focus on Uber and Lyft is exactly right. We could subsidize those people who truly need and want point-to-point service by just giving them a public-funded transit card.
Lars Larson
I don’t like the subsidies, but if we have to subsidize anything, let’s do it the most efficient way. That’s John Ley, he’s running for the Washington House of Reps. He’ll be on the ballot in November. District 18, Position 2. And I voted for him.
