By Scott Calvert 

Public transit agencies across the U.S. are cutting service and reducing their workforces as they face a cash crunch that is worsening along with the coronavirus pandemic.

Ridership is stuck at historically low levels and the current Covid-19 surge has further dimmed odds that large numbers of riders will return to buses, subways and commuter railroads soon, officials say. Federal funding that agencies received from the spring's relief package is starting to run out, and local tax revenues that support many transit systems have shriveled.

In San Francisco, the Muni transit system faces the biggest crisis of its 110-year history, said Jeffrey Tumlin, transportation director of the San Francisco Municipal Transportation Agency. Bus boardings are down 70%, and transit revenue has plunged 93%.

"We've had to cut expenditures massively in order to keep operating. We are shrinking as rapidly as we can through attrition," Mr. Tumlin said, citing more than 800 vacancies. Officials have slashed spending on supplies to the point where mechanics haven't always had parts to fix buses, he said.

The agency has eliminated half its transit lines and focused on serving essential workers and neighborhoods with the fewest mobility options.

Even so, Mr. Tumlin said, "we leave hundreds of essential workers behind at the curb every day, on a dozen of our lines, because we've exceeded the social-distancing requirements."

Dispatching more buses isn't an option, he said: "We are out of money."

In Washington, D.C., the Metro system's weekday rail ridership is about 88% lower than normal, agency figures show, with many people working from home and few tourists in town. Bus ridership is down nearly 60%, and the system isn't charging bus riders because passengers board at the back to reduce the spread of the virus.

The agency expects $182 million in revenue this fiscal year, down from $825 million a year before the pandemic, said Paul Wiedefeld, general manager and CEO of the Washington Metropolitan Area Transit Authority. Metro will offer retirement incentives, with a goal of cutting 1,400 of the agency's 12,000 positions. If too few employees retire, the agency will have to resort to layoffs, he said.

Funds from the federal Cares Act relief package will run out by March, he said, and further service and job cuts may be necessary.

The nation's biggest transit agency, New York's Metropolitan Transportation Authority, recently warned it might have to cut service on the subway by 40% and on its two commuter rail systems by half unless a federal bailout comes soon. Revenues have plummeted due to a ridership slump and an anticipated reduction in funds from dedicated taxes.

In Denver, the Regional Transportation District said it would lay off about 400 of its roughly 2,600 employees in January because of a projected $140 million deficit. In addition, many employees will have to take furlough days and a pay cut.

"We're now between a rock and a hard place, recognizing that we are still in the midst of this pandemic and things don't seem to be getting better," said Debra Johnson, who took over earlier this month as the agency's CEO and general manager.

The transit sector is calling on Congress to approve a new $32 billion aid package, joining other industries queued up for more help from Washington.

A recent survey by the industry group American Public Transportation Association found that six in 10 transit systems will need to scale back service and furlough employees without emergency federal funding.

"We do need to build this bridge from where we are in the throes of this pandemic to when we come out," said Paul Skoutelas, president and chief executive of the group.

Smaller transit systems are struggling as well. The bus network in Champaign-Urbana, Ill., home to the University of Illinois, plans to cut service by 40% in January, on top of a previous 10% rollback, said Karl Gnadt, managing director of the Champaign-Urbana Mass Transit District.

Ridership is down 75%, largely because few students, faculty and staff are on campus. But he said he doesn't want to alienate remaining customers. "The bus rider has to be able to depend on the bus being there when they need to travel," he said.

The agency expects to get about half its expected annual payment from the university, and so far the state has sent just $7 million of an anticipated $39 million, which constitutes its biggest revenue source.

State payments to transit agencies over the summer were lower than usual because of decreased sales tax revenue, which has since rebounded, a spokesman for the Illinois Department of Transportation said. "The department has no reason to believe that the projected awards to each agency cannot be met," he said.

Meantime, the $12 million in Cares Act money that the Champaign-Urbana transit agency received is dwindling, Mr. Gnadt said, raising the potential for even deeper cuts and layoffs in the months ahead.

"We are rapidly racing toward the fiscal cliff," he said. "I don't want our employees to be fearful that there's a Sword of Damocles hanging over their head. But the reality is we can't hold on forever."

Moody's Investors Service this month painted a gloomy picture of mass transit in 2021, saying ridership would likely grow only about 30% above this year's depressed levels. It also said the rise of remote working and changing travel patterns could cause permanent ridership declines, a concern shared by some transit advocates.

"We don't know how many of the changes we've made will be permanent, and how much we'll bounce back," said Beth Osborne, director of Transportation for America, an advocacy group.

--Paul Berger contributed to this article.

Write to Scott Calvert at scott.calvert@wsj.com

(END) Dow Jones Newswires

November 28, 2020 12:15 ET (17:15 GMT)