San Francisco Subway Has Questionable Future

November 6, 2013

The recent strike by employees of the Bay Area Rapid Transit (BART) subway system in the San Francisco area suggests California may be heading down a dismal path, say Iain Murray, vice president for strategy, and Marc Scribner, infrastructure policy analyst, at the Competitive Enterprise Institute.

  • According to the most recent audited financial statement, during Fiscal Years 2010-2012, BART's operating losses totaled nearly $800 million over the three-year period.
  • BART officials estimate the system will need $15 billion in new investment over the next 15 to 20 years, which means that annual capital contributions will need to nearly triple from their current levels.

Labor costs remain one of BART's largest and least flexible budget expenses.

  • To put it in perspective, in FY 2012, BART collected just over $360 million from customers, yet paid employees nearly $380 million.
  • Even before paying vendors for supplies, equipment and energy, San Francisco's rail transit system is already in the red.

Union officials simply refuse to accept this reality. In their view, the system is already exploiting them and they refuse to budge on such issues as flexibility on working hours. Some transit workers work a four-day, 10-hours-a-day schedule, while other work five days at eight hours a day. BART officials want the flexibility to change this to reduce costs. The union says no, hence the second strike in four months.

Source: Iain Murray and Marc Scribner, "BART's Bogus Ride," American Spectator, October 22, 2013.

 

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