MEDIA RELEASES

By: ANA CAMPOY and ALEX ROTH, The Wall Street Journal Online

After decades trying to gin up enthusiasm for their services, public transit agencies are now having trouble meeting rising demand as more commuters dodge high gasoline prices by hopping on a train or bus.

Under normal circumstances, the surge in ridership would be a boon to the agencies, which have long argued that public transit is one of the best ways to combat social ills such as traffic congestion and global warming.

But at the very moment they should be investing to expand their services, the same driver that is ballooning ridership is crippling transit budgets: steep fuel bills. As record numbers of people board buses and trains, higher costs are forcing public transit agencies to scale back on services, further straining capacity. Local transit agencies fret that the capacity problems may squander the opportunity to convert more Americans to public transportation.

 
"There's only so many times a person can walk out to a bus stop and say, 'Oh, it's too crowded to ride, I'm driving,'" says Jeff A. Meilbeck, general manager of the Northern Arizona Intergovernmental Public Transportation Authority. Ridership on Flagstaff's Mountain Line rose 34% to 85,602 in April from 63,685 in April 2007, he says, noting that drivers have had to turn some riders away.

Rising fuel prices have hit public transportation harder than consumers. Diesel, the main fuel for bus systems, has gone up 40% since the beginning of the year to an average $4.72 a gallon last week. Regular gasoline is up 27%. Adding to the crunch: Transit budgets that are largely funded by sales tax revenue are shrinking as consumers spend less in response to tough economic times.

"We're all getting killed," says Cal Marsella, general manager for Denver's Regional Transportation District.

To compensate, many agencies have been canceling plans to expand service, raiding emergency funds and raising fares to stay in budget. When that's not enough, agencies are resorting to cuts in service. In a survey of the nation's public transit agencies to be released Friday, the American Public Transportation Association, which lobbies for greater support of public transit, found that 19% of bus operators responding are cutting service to some degree, while 21% of rail operators are doing the same.

That, combined with increased demand, leaves long lines forming at bus stops in cities nationwide. Commuter trains and park-and-ride buses that bring workers in from the suburbs are packed to standing-room-only.

As gas prices go higher, the problem will get worse. This month, researchers from International Business Machines Corp. surveyed 4,091 drivers in 10 U.S. cities, including Atlanta, Los Angeles and New York. With national gasoline prices averaging $3.67 per gallon at the time of the survey, 9% of drivers said they already were seriously considering other commuting options. At $4.50 a gallon, the figure jumps to 46%.

Some systems are having trouble serving those already committed to public transportation. The bus Susan Christie, a 60-year-old jewelry designer who lives in San Diego, takes almost every day will no longer run starting June 14th. Ms. Christie, who is diabetic and has eye problems, says public transit is her "lifeline" and the only way she has to get around. She will now have to leave home earlier to walk to a stop farther away and stay home when she's not feeling well. "It makes life more difficult," she says.

Peter Maranci, 44, a network analyst who rides the train from his Woonsocket, R.I., home to his job in downtown Boston, said his train has been so packed in recent months that "I regularly saw children being forced to stand, pregnant women being forced to stand."

A few weeks ago, Mr. Maranci, who writes a blog called Charlie on the Commuter Rail, took a camera on board the train and posted a picture on his web site showing one of the jam-packed train cars. "Every seat is full to capacity," he wrote. "The aisles are packed solid, and even the vestibules -- which are supposed to be off-limits for passengers -- are full of riders."

To be sure, some agencies are finding ways to increase services despite the crunch. But even those moves are falling short of swelling demand. In Atlanta, the Georgia Regional Transportation Authority had added 40% more bus routes in the past year, but has seen bus ridership increase by 60%. Atlanta transit officials are hoping to expand their fleet of 127 buses by an additional 28 buses if they can find the funding, spokesman William M. Mecke said.

Higher revenue from fuller buses are helping, but not enough for most agencies to cover the extra fuel costs and lower sales tax revenue.

Fuel costs are taking an increasingly bigger chunk of transit budgets. Transit agencies around the country use about 735 million gallons of diesel a year to power their buses, which account for more than 40% of total miles traveled on public transportation, according to the transit association. Many of them are strictly forbidden to run a deficit.

Kevin E. Desmond, general manager of King County Metro Transit in Seattle, said the agency is expecting to go $13 million over budget this year on its fuel costs as it charts record ridership. "We're a pay-as-you-go organization and we can only live within the revenues we receive." Going into debt, he says, "is a prescription for bankruptcy."

The agency already has raised bus fares earlier this year and is considering a wide range of other options, including another fare increase, dipping into reserves, cutting back capital expenditures such as new buses or, as a last resort, cutting services.

"This is precisely the wrong time to be considering cutting services because the demand is so high," he said. "But the fact is, we have to make up the deficit one way or another."

For many agencies, the sharp run-up in diesel prices came as a surprise. Canton's transit agency, the Stark Area Regional Transit Authority, had budgeted for $2.22-a-gallon diesel. These days, it's paying closer to $4.15 a gallon, says Charles Odimgbe, the agency's chief executive. With ridership up 8% in April compared to last year, Mr. Odimgbe had to delay the starting time of its bus routes by half an hour to save money.

San Diego region Metropolitan Transit System, which has been gradually switching its fleet to compressed natural gas, expects to pay almost 40% more for fuel next fiscal year than what it paid in 2005, says Rob Schupp, a spokesman for the agency.

It's looking at a $6.5-million hole in its fiscal 2009 budget due to the higher fuel prices, lower sales tax revenues and cuts in state funding. Reducing services at some of its bus routes will cover $1.2 million of that.

In Denver, sales tax revenue, which funds about 80% of the transit budget, is shaping up to be $18 million less than projected. Denver's transit officials are planning to cut services at lesser-used routes and shift some of the buses to higher-demand routes. For example, the agency is proposing to reallocate buses from a route that takes riders from a small mountain community to a tech center, which carries about 12 passengers an hour, to a 25-minute express route from the city's north suburbs to downtown, which carries 86.

While the will for more public transit is evident, the way to secure federal funding for it isn't.

In coming months, local agencies say they will continue to scrounge for resources to keep their services running, including increasing the advertising on the sides of their buses and trams and going to the public for money. Jason Jordan, director of the research group, Center for Transportation Excellence, says voters will consider about 50 ballot measures around the country this November aimed at increasing public transportation funding.

But agency managers and other transportation experts say ultimately, the federal government will have to step in to keep overwhelmed systems afloat. William W. Millar, president of the American Public Transportation Association, argued that if some of the money funding highways had been diverted to transit, the current bind might have been avoided.

"There's no doubt in my mind we would be using far less foreign oil," says Mr. Millar, "and we would have more public transportation available."