The Metropolitan Transit System board of directors on Thursday failed to agree on how to prepare for a looming budget deficit that could force deep service cuts in as little as three years.
While MTS has seen industry-leading ridership gains since the COVID-19 pandemic, fare revenues and government subsidies have not kept pace with the rising cost of operating the system. The agency is currently on track to virtually run out of reserves in the fall of 2028.
Agency staff on Thursday proposed a set of mitigation measures that would stretch out those reserves until 2030, giving more time to find new revenue sources, such as additional state or federal subsidies or a local ballot measure.
After several attempts to reach consensus on a plan failed, MTS board members ultimately voted to kick the issue back to the executive committee for further discussion.
The most controversial measure was a potential fare increase. MTS has not substantially raised fares since 2009. The current full price of a monthly pass, $72, would be $110 if adjusted for inflation, staff said.
MTS staff recommended aiming for an overall 10% increase in fare revenue, but declined to detail how that might be achieved. San Diego City Councilmember Sean Elo-Rivera said the vast majority of riders are low income and may be unable to absorb a fare increase into their household budgets.
"This is not the time to ask them to pay more until every alternative option has been explored," Elo-Rivera said.
MTS CEO Sharon Cooney said when the agency surveys its riders, most indicate they would prefer to pay higher fares than accept cuts to service.
"The vast majority of our riders are transit dependent," Cooney said. "They won't get to their jobs or their school if they don't have their route. But if they have to pay $5 more a month, they'd rather do that than not be able to access transit."
MTS staff also proposed shifting more of its capital budget — which pays for infrastructure like new vehicles, bus shelters and upgraded trolley tracks — into its operations budget, which pays for things like fuel and employee salaries. And they suggested changes to the agency's pension policies that would delay paying off pension debt and assume higher returns from the pension fund's investment portfolio.
Even the most aggressive cost saving measures presented by MTS would only delay, not eliminate, the need to either raise new revenue or cut services. MTS wants to ask voters for a sales tax increase in 2028 that would provide some $300 million in new revenue each year, eliminating the deficit and providing more funds for increased services.
