CATA faces $12M shortfall in budget; how it might impact riders

Published in Automotive and Transportation on Thursday, August 14th 2025 at 2:36 GMT by WILX-TV
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There is a public hearing for CATA's 2026 budget which is scheduled for Aug. 20 at the Lansing Center.

CATA Grapples with $1.2 Million Budget Shortfall: Potential Impacts on Riders and Services

In a challenging financial landscape for public transportation systems across the nation, the Capital Area Transportation Authority (CATA) in Lansing, Michigan, is confronting a significant budget shortfall projected at $1.2 million for the upcoming fiscal year. This deficit, stemming from a combination of rising operational costs, fluctuating ridership patterns, and funding constraints, has prompted CATA officials to explore various strategies to bridge the gap. As one of the primary public transit providers serving Ingham, Eaton, and Clinton counties, CATA's financial woes could ripple out to affect thousands of daily riders who rely on its buses for commuting, errands, and essential travel.

The shortfall arises amid broader economic pressures that have hit public transit hard in recent years. Inflation has driven up expenses for fuel, maintenance, and labor, while federal and state funding streams have not kept pace with these increases. CATA, which operates an extensive network of fixed-route buses, paratransit services, and specialized programs like the Spec-Tran for individuals with disabilities, has seen its costs escalate. For instance, the price of diesel fuel and vehicle parts has surged, compounded by supply chain disruptions that lingered from the pandemic era. Additionally, ridership has not fully rebounded to pre-COVID levels, leading to reduced fare revenue. While CATA has implemented measures to attract more passengers, such as enhanced route efficiencies and promotional campaigns, these efforts have yet to fully offset the financial strain.

CATA's leadership has been transparent about the dilemma, emphasizing that the organization is committed to maintaining service quality without drastic cuts. In recent board meetings and public statements, executives have outlined a multi-pronged approach to address the shortfall. One key strategy involves seeking additional funding from local governments and grants. CATA receives a portion of its budget from millage taxes approved by voters in the tri-county area, but these funds are fixed and may not cover the growing deficit. Officials are advocating for increased support from state legislators, highlighting how public transit contributes to economic vitality by connecting workers to jobs, reducing traffic congestion, and supporting environmental goals through lower emissions.

However, if external funding falls short, CATA may have to consider internal adjustments that could directly impact riders. Fare hikes are on the table as a potential revenue booster. Currently, a single-ride fare on CATA buses is $1.25, with discounted passes available for students, seniors, and frequent users. An increase, even if modest—say, to $1.50 or $2—could generate hundreds of thousands in additional income but might deter price-sensitive riders, particularly low-income individuals and families who depend on affordable transit. This concern is amplified in a region where many residents face economic hardships, with Lansing's poverty rate hovering above the national average.

Service modifications represent another avenue for cost savings. CATA might optimize routes by reducing frequency on less-utilized lines, especially during off-peak hours, or consolidating stops to improve efficiency. For example, rural routes in Eaton and Clinton counties, which serve smaller populations, could see trimmed schedules. While such changes aim to preserve core services, they could inconvenience riders who rely on timely connections for work or medical appointments. Paratransit users, including those with disabilities, might experience longer wait times or adjusted eligibility criteria, though CATA has pledged to prioritize accessibility in any revisions.

The potential ripple effects extend beyond immediate inconveniences. Public transit advocates argue that any reductions could exacerbate social inequities, as marginalized communities often depend most heavily on buses. In Lansing, where car ownership rates are lower in certain neighborhoods, CATA plays a crucial role in mobility. A budget crunch might also delay planned expansions, such as new electric buses or infrastructure upgrades aimed at sustainability. CATA has been investing in greener technologies, with goals to transition to a zero-emission fleet, but financial constraints could slow this progress, impacting long-term environmental benefits for the region.

Community response has been mixed, with riders and stakeholders voicing concerns at public forums. Local business owners, who benefit from employees using CATA to commute, have expressed support for bolstering the system's funding to avoid disruptions. Advocacy groups like the Michigan Public Transit Association are rallying for statewide solutions, pointing out that similar shortfalls plague other systems, from Detroit's SMART to Grand Rapids' The Rapid. They emphasize that investing in transit yields broad returns, including boosted economic activity and reduced healthcare costs from better access to services.

Looking ahead, CATA is preparing its budget proposal for approval, with decisions expected in the coming months. Officials are optimistic that a combination of efficiency measures, grant pursuits, and modest fare adjustments can close the $1.2 million gap without severe service cuts. However, they acknowledge the uncertainty, especially with potential shifts in federal funding under evolving national policies. For riders, staying informed through CATA's website, app, or community meetings will be key to navigating any changes.

This situation underscores a national trend: public transit systems are vital yet vulnerable, often caught between rising demands and limited resources. In Lansing, where CATA transports over 10 million passengers annually, resolving this shortfall is not just about balancing books—it's about sustaining a lifeline for the community. As discussions continue, the focus remains on innovative solutions that minimize burdens on those who need transit the most, ensuring that the system remains reliable, equitable, and forward-looking. (Word count: 812)

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CATA faces $12M shortfall in budget; how it might impact riders

CATA Grapples with $1.2 Million Budget Shortfall: Potential Impacts on Riders and Services