For RGRTA, the road ahead looks rough without more state funding

The Rochester-Genesee Regional Transportation Authority, which operates the Regional Transit Service, is staring down a growing budget shortfall if the state doesn’t increase subsidies to upstate transit agencies.

The agency relies heavily on government subsidies to supplement revenues—especially subsidies from the state government, which are its largest single source of revenue, according to its multiyear budget projection.

These state subsidies, which RGRTA expects to make up over 50 percent of its total revenues every year through 2028-2029, are the subject of yearly negotiations during the state budget process. The agency, alongside others upstate facing similar issues, is looking for a 15 percent increase in state assistance alongside additional capital funding in this year’s state budget, which is currently in the final rounds of negotiations.

From now until 2028-2029, barring this additional state funding, the agency expects its operating deficit to balloon by dozens of millions of dollars as relatively flat revenues fail to keep pace with rising operating expenses. A bump in state assistance, RGRTA CEO Miguel Velázquez says, is critical.

“It’s critical because public transit across the U.S., certainly in Upstate New York, has been underfunded for decades, and that has led to a reduction in service, which then leads to not serving the community the way the community needs to be served, and really meeting the needs of the community,” he says.

RGRTA’s outlook

The transit agency’s multiyear budget projection, approved in March, adopts a conservative outlook. It assumes only a one-time, 2 percent increase in state operating assistance that holds flat until the 2028-2029 fiscal year.

This approach, which paints a kind of worst-case scenario for the agency, is necessary because over 50 percent of the agency’s state-level funding comes from the state’s general fund, which puts it in competition with other budgeting priorities, Velázquez says. The process creates an uncertain outlook.

“We don’t know if next year or this year, as an example, are we going to get cut? Are we going to get the same amount? Are we going to get an increase?” he says.

So, RGRTA prepares for the worst. And this conservative projection highlights causes for concern—growing expenses, flat revenues and the need to dip into the agency’s unrestricted assets to cover the difference.

“When you put those things together, we’re looking at some deficits, what we call structural deficits, meaning that our revenues don’t match our expenses,” Velázquez says. The projection shows the agency’s deficit expanding to $56.6 million as expenses jump by an average of over $12 million per year while revenues drop to $114.8 million in 2026-2027 and then remain flat.

Velázquez says the situation is, in part, a hangover from the height of the COVID-19 pandemic. It brought increased costs for vehicles, parts and wages that continue to go up, though at a lower rate than when they first increased, he says. This came alongside a 50 percent drop in ridership, which has only recovered to 80 percent of pre-pandemic levels despite “good growth,” he adds.

In 2024, ridership totaled 11,735,496 in a service area spanning Monroe and seven neighboring counties with a population of 1,181,497. The service—which employed 945 people last year down slightly compared with four years ago—operates 407 buses.

Total planned operating expenses for 2025-2026 are $135.9 million, up 4.1 percent. Personnel costs—salaries and benefits—are by far the largest operating expense. For 2025-2026, they are projected to increase by $4.2 million to $98.3 million, 72 percent of total operating expenses. The increase is due primarily to cost-of-living wage adjustments, contractual obligations, and health insurance. Non-personnel costs are budgeted at $37.6 million, 0r 28 percent of total expenses, an increase of $1.2 million from the year before.

Customer fares—RGRTA maintains a base fare of $1—are projected to total $7.2 million, or roughly 5 percent of $135.9 million in total operating revenues.

With state funding held roughly flat around $67 million annually, the agency increasingly would have to explore opportunities for streamlining processes, bringing in additional local revenue and, as a matter of last resort, service cuts, which would hurt riders who depend on RTS, he says.

“Let’s hope that day never comes,” Velázquez says of the prospect of service cuts, “but it could be significant. … We would have to be as surgical as we can on the service.” 

The agency would have to look at cuts to its lowest-performing services—Velázquez used RTS On Demand as an example—and it would also have to look at decreasing frequency, he says. 

But, even with those hypothetical cuts, RGRTA (like many other transit agencies nationwide) is so reliant on subsidies that it is hard to imagine a way forward without more state funds, Velázquez says. Instead of the 2 percent increase its projections assume, RGRTA and other upstate transit agencies are looking for a 15 percent increase in state operating assistance this year alongside $1 billion in capital funding over the next four years.

“We can do it as much as we want and can,” he says of hypothesizing about cost-cutting. “But the reality of public transit across the county—in the United States, public transit is just heavily subsidized.”

The state budget

Securing the increased state funding has been the subject of advocacy efforts by RGRTA and other transit agencies throughout the state channeled through, in large part, the New York Public Transit Association, which is composed of elected representatives from New York transit agencies. This includes Velázquez, who is NYPTA’s vice president.

“We go back and forth, and we meet with our local delegation in Albany, as well as the Budget Office, the DOT, the governor’s office, all that, explaining the situation for us, the situation for transit agencies, because it’s very similar between agencies, especially across Upstate New York,” he says.

The increases will have to come in the state budget, which was due Tuesday and reportedly is nearing finalization.

In New York, the annual budget process starts with the governor pitching an executive budget in January. Each chamber of the state Legislature—the Assembly and the Senate—then passes their “one-house” budget based on the executive budget, which essentially sets each chamber’s starting points for negotiation. 

“Then you combine the items in the one-house budgets for the Assembly, for the Senate and the executive budget to come up with what we call the finally adopted state budget around this time of year,” says state Sen. Jeremy Cooney.

Gov. Kathy Hochul put forward a 3.38 percent increase in state operating assistance for upstate transit agencies in her executive budget, well below the 15 percent mark the transit agencies are looking for but above prior figures she had floated. However, the Senate, of which Cooney is the transportation committee chair, sought the full 15 percent figure alongside $250 million in capital funding in its one-house budget. The Assembly sought a 7 percent increase in operating assistance.

“None of those numbers, mathematically or formulaically, get added together to produce the outcome, but rather, they just show that if both houses are looking for more than what the governor put forward at her 3.4 percent mark, it’s a good indicator that the final number will be higher than 3.4,” Cooney says.

Cooney’s role as transportation chair means he is being consulted on priorities in that area, and more money for upstate transit agencies is one of his must-haves, he says.

“The argument I have made is that we have to increase the frequency of service,” he says. “So, I said publicly that we know that if you’re down in New York City and you miss the subway, you wait about 10 minutes and another train is going to come. You have to wait more than 10 minutes, you start to stomp your foot. In Upstate New York and cities like Rochester, Syracuse, Buffalo, if you missed the bus, you may be waiting 40 to 45 minutes for the next bus to come. That’s just not workable. That’s why we don’t have a higher ridership.”

With additional state funding, Velázquez says, expanding the frequency of RTS routes would be the agency’s highest priority based on feedback they have garnered from riders over the years. They have routes already lined up that they are looking to make more frequent and convenient.

“If we were to get a 15 percent increase, those are the things that we will start looking at,” he says. “How do we help the budget be more structurally sound? And then, what are the services that we would improve?”

Increased transit funding also aligns with other priorities in this year’s state budget, particularly affordability, Cooney says, as robust transit service can save New Yorkers money on car ownership costs and attract people and employers to move to the state.

Indeed, in Rochester, a significant portion of RTS ridership is lower-income and living without a car. According to February 2025 quarterly survey figures provided by Public Information Officer Tom Brede, 58 percent of riders made less than $24,000 a year; 67 percent did not own a vehicle.

Expanding transit service is, thus, also an equity measure, Cooney says. On top of being lower-income, RTS’ ridership is 76 percent nonwhite, and expanding transit reliability comes with other knock-on benefits for low-income communities and people of color.

“Transportation used to just be known in New York state politics as roads and bridges and infrastructure,” Cooney says. “I think it’s roads, bridges, infrastructures and equity, because, again, workers can’t access the economic development opportunities that we work so hard to bring to our state if they can’t get to the job.”

He adds: “And you know, people are not getting health care access because they can’t get to their appointments. And, from an environmental justice standpoint, communities that have robust public transit have cleaner air for people to breathe because they let less carbon off from automobiles. So, for me, it’s about fairness and equity.”

Cooney is optimistic that the finalized budget, which he says—careful to highlight his uncertainty—may be passed early next week, will include upstate transit funding figures between the asks of the executive budget and the Senate’s one-house budget.

“In most circumstances, you fall somewhere in the middle, which would actually be great,” Velázquez says.

The long term

This advocacy cycle for transit agencies is a yearly process that restarts the day after the budget is passed, Velázquez says. Every year, the funding is uncertain, and this constrains the agency’s ability to plan for the future even as it does due diligence in exploring what better service ought to look like.

“We plan for the bare minimum, basically, the status quo that, you know, service will remain the same,” he says. “So, yes, it makes it very hard to plan out.”

This uncertainty comes in part because of the funding sources for state operating assistance to upstate transit agencies. Most of the money comes from the state’s general fund, which places it in political competition with other funding priorities, Cooney says. The rest comes from assessed fees on sources so not-future-proofed as to induce a laugh from the senator: taxes on petroleum and landline phone fees.

“With those two revenues going down, the only way you can make up the difference is by putting more money from the state general fund when we go, you know, advocate for an increase. Under that circumstance, we’re competing with all sorts of other services out there right for those state general funds,” Velázquez says.

And this competition will get stiffer as the state steps in to meet gaps created by federal funding cuts under President Donald Trump, Cooney says. Thus, a big long-term priority for the agency, NYPTA and Cooney is adding new dedicated revenue sources for upstate transit.

For instance, Cooney has pushed for additional revenue from state Department of Motor Vehicles registration fees, a funding source that the Metropolitan Transportation Agency in New York City is already tapping into.

“Why don’t we do the same thing in Upstate New York? You know, if you go to register your automobile, and that’s your right, that’s your power, right? But why not have a modest surcharge? I’m talking like $10, right? I’m not talking hundreds of dollars, $10 per registration that gets reinvested into (state operating assistance for upstate transit).”

More stable, dedicated funding sources could afford upstate transit agencies more certainty in planning service improvements, Velázquez says. They wouldn’t be so stuck planning for the kinds of worst-case scenarios RGRTA is currently staring down.

“If we know that, hey, the account is well funded because it has these increasing sources of revenue, we can then count that, ‘Hey, we can at least count for a 5 percent increase every year for the next three years,’ as an example. Based on that, now I can plan my service, but not knowing every year whether you’re going to be cut, flat or get a small increase is very hard to plan for your service,” Velázquez says.

Justin O’Connor is a Rochester Beacon contributing writer.

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