UTA foresees a 15% permanent ridership drop as its ‘new normal’ after COVID-19

(Rick Egan | Tribune file photo) A UTA bus in Downtown Salt Lake City, Aug. 6, 2019.

After the COVID-19 pandemic ends and a “new normal” emerges, the Utah Transit Authority said Thursday that ridership and revenue from fares will be significantly smaller — down maybe 15% — and it may take the agency several years to work back even to that lower plateau.

UTA Chief Financial Officer Bob Biles said ridership currently is about 70% below normal.

He outlined projections to the State Bonding Commission on Thursday that show revenue from passenger fares is expected to be down 41% this year compared to previous projections; down 34% next year; and by 22% in 2022.

He estimates that the agency will finally hit a new normal in 2023 — but fare revenues from passengers are now expected to continue to be 15% lower from previous long-term projections for years after that.

Fares produce only a minor portion of UTA’s overall revenue, about 11%. The lion’s share comes from sales tax, which is projected to recover more quickly and better than passenger fares.

Because of that, Biles projects that overall UTA revenues will hit a “new normal” in 2023 that will be “about 4% to 4.5% less revenue than we had anticipated” in long-range plans and will continue at that level for years.

“So, a permanent reduction in the amount of revenues” is coming, Biles said. “If you go back to the Great Recession, we saw a permanent reduction of about $80 million a year in revenue. No one knows what this [current recession] is going to look like. But that’s what we’re modeling right now.”

UTA Executive Director Carolyn Gonot said one reason projections show decreased fare revenue is that a recent survey of current and former pass holders — who provide about half of UTA ridership — show “telecommuting is here to stay for many people, and for quite a while.”

That survey showed about a third of former pass holders say they may never return. Many said they have other possibly safer options than being in close quarters with strangers on a bus such as using personal cars, and many reported they may be working from home for the foreseeable future and don’t need transit.

Gonot said the agency has worked hard to resolve such concerns and bring back customers, including requiring face coverings on board (and providing them if necessary), adding enough service to allow social distancing and expanding deep cleaning of vehicles.

Biles said $187 million in federal pandemic aid is helping UTA make ends meet — and should mostly make up for lost tax and fare revenue maybe through 2023.

With such assistance, “We’ve not had to lay off anybody,” said UTA Board Chairman Carlton Christensen. “But we have not hired new operators, for example. And by attrition, we have not replaced a number of positions.”

UTA significantly cut service in April during stay-at-home directives but continued to add back service as demand returned. Gonot said that by next month, service will be restored to about 90% of the pre-COVID levels. She said that also helps to allow adequate social distancing.

Because of recent reforms passed by the Legislature after past financial scandals at UTA and because of its large $2 billion in debt amassed to build rail lines, the agency must now give an annual report on its long-term financial plans to the State Bonding Commission — which it did Thursday.

State Treasurer David Damschen, a member of the bonding commission, praised some of the recent financial action taken by new leaders at the agency, including refinancing and refunding some of its previous bonds over the past two years to save $29 million.

“The work that you’ve done this last year has been extremely beneficial,” he said, “and [is] solidifying UTA’s financial position.”