RT Faces $16 Million Budget Deficit for Fiscal Year 2010
Potential Service Cuts and Employee Layoffs to Balance Budget

As the Sacramento Regional Transit District (RT) rebounds from bus service reductions and fare increases implemented in 2009, the state's complete elimination of State Transit Assistance funds, and declining state and local sales tax revenues continue to significantly impact RT's operating budget.

RT ridership and fare revenue have been adversely affected by the downturn in the economy, state furloughs and high unemployment. Fare revenue is now projected to be approximately $7 million below budget and sales tax based revenues dedicated to transit continue to decline.

State sales tax revenue, which experienced a decline this past summer of 8.8 percent, will be further reduced by 10 percent in mid-February, for a total reduction of 18.8 percent for Fiscal Year 2010, and is expected to further decline by 19.8 percent in Fiscal Year 2011. In addition, Measure A local sales tax revenue is expected to experience similar reductions for Fiscal Year 2010 and 2011.

These factors combined have created an approximately $16 million budget shortfall for this fiscal year. Despite recent service reductions, fare increases in January 2009 and September 2009, a hiring freeze, freezing employee pay, implementing employee furloughs, and a number of other cost-cutting measures, RT is now faced with an unanticipated budget deficit that must be resolved by June 30, 2010. RT must also develop a long term plan to address the expected further decline in revenue in Fiscal Year 2011.

Further compounding RT's current budget situation is the recent announcement by the Governor of his intention to permanently eliminate State Transit Assistance funds. With no immediate resolution to restore state funding to transit agencies, the Federal Transit Administration has denied RT's request to advance the South Line Phase 2 light rail extension and start construction in spring 2010. This action will delay the 4.3-mile project, increase construction costs, and jeopardize approximately 1,440 direct and 2,385 indirect and induced new jobs in the Sacramento region.

RT will be forced to drastically reduce the level of bus and light rail service, and lay off a high percentage of employees throughout the agency. RT staff is working to identify options to address this significant budget shortfall with the goal of maintaining as much service to the public as possible.

"Without a reliable, steady source of funding for transit, RT and agencies across the state will be forced to cut vital services that are desperately needed by our communities," Mike Wiley, General Manager/CEO, stated. "The Governor's reluctance to restore illegally raided funds is certain to have a devastating and long-lasting impact on RT riders, employees and the region."

RT staff will present a budget update and recommendations at the RT Board of Directors meeting on Monday, February 22, 2010, at 6 p.m. in the RT Auditorium located at 1400 29th Street (at N Street).