Is Caltrain becoming a commuter only rail system?

On Thursday, Caltrain executive director Michael Scanlon made comments regarding the financial status of Caltrain that received coverage from various local media:

Caltrain is broke and will almost certainly need to wipe out half its service, leaving no trains on weekends, weeknights or midday and leaving the agency’s future in doubt, officials said Thursday.

“And that’s only if we’re lucky,” Caltrain CEO Mike Scanlon told the agency’s board of directors. “This is not an April fool’s joke. This is real.”

Scanlon said the cuts would need to be completed by June 2011, although the agency may begin reducing its schedule as soon as this fall. The board would vote on the cuts at a future meeting.

Officials at the agency stopped short of saying they expected the railroad to fold, but said the news calls into question its ability to survive. Scanlon said the agency’s business model is simply not sustainable.

“We’re rapidly approaching a cliff,” he said. “It’s going to be very, very painful. It’s probably going to force people back on congested freeways.”

Scanlon made the comments because of the financial status of SamTrans (transit agency in San Mateo County), which he also manages. Currently, Caltrain’s operating subsidy is provided by the three local transit agencies in San Francisco, San Mateo, and Santa Clara Counties. As the head of SamTrans, he wants SamTrans to reduce Caltrain operating subsidy by 70%. Because historically all three counties increase their subsidies by the same percentage, the other two counties could also cut their subsidies by 70%; hence the large cuts proposed for off peak and weekend service.

It is too early to tell whether this threat of eliminating Caltrain off-peak service is real. Five years ago, when SamTrans was also subsidizing BART service in San Mateo County, Michael Scanlon also threatened to end weekend BART service at some stations between Colma and SFO. As a result of negotiations between BART and SamTrans, SamTrans got off the hook on additional operating subsidies for that line. That subsidy was taking an unexpected bite out of SamTrans’ budget, because prior to the the opening SamTrans thought it would generate an operating surplus instead.

Caltrain is not like BART because Caltrain does not have a dedicated tax source for operations. BART not only directly receives a portion of sales taxes in its three member counties, it also receives a cut from the bridge tolls. During the years when BART received more taxes than it was spending, BART could increase service, or put the funds into a reserve for rainy days.

On the other hand, Caltrain only receives funding from the three member transit agencies. Because of the historic practice of changing the subsidy level by consensus, Caltrain has been starved of revenue even in better economic times. Also considering that the three agencies have their own priorities, it makes long term planning hard because of the difficulty in predicting future operating revenues.

Although dedicated funding is extremely desirable, the path of getting there isn’t a simple one. It would take an act in Sacramento to establish a Caltrain special district, which would have taxing power, and approval by voters to establish a new tax or fee. Considering that there’s much more political resistance against cutting rail service than cutting bus service, local bus service would be in a greater jeopardy if politicians in the three counties aren’t ready to seek dedicated revenue for Caltrain.

Whether or not the SamTrans board has the will to cut Caltrain subsidy, Caltrain should be converted into a special district as soon as possible so that we can have a real dialogue about dedicated funding. This is not the first time Caltrain is having a financial crisis (the last one was just a year ago), and this will not be the last one.