The Capital Area Transportation Authority approved its $70 million budget for the 2026 fiscal year Wednesday amid a $12 million budget shortfall that comes as a result of lowering state and federal grants.
CATA CEO Bradley Funkhouser said that the company was prepared for the shortfall, and will remain operational without service cuts for the next year or so. However, he’s also made it clear that the situation could worsen in the next fiscal year.
“I'm glad the public is talking about it,” Funkhouser said about the increased press coverage on the budget in the last week. “Because without change at the state and federal level, there will be a huge shortfall a year from now.”
When asked after the meeting if MSU students should have any concern for services being cut, Funkhouser said that everyone has something to be concerned about if the state and federal government do not invest more in transit.
"It is a real threat a year from now," Funkhouser said.
He said if a year goes by without change, the company will undergo a comprehensive operational analysis, which will involve MSU, CATA and other county service recipients creating a long-term plan for budget adjustments.
But the issue goes beyond the Lansing area, he said, making reference to the $200 million cuts that Philidelphia’s SEPTA transit system is facing after lawmakers failed to reach a deal that secured funding. Even around Michigan, some are finding that the state’s investment in public transit is falling flat compared to recent years.
Estimates for the Michigan Department of Transportation Local Bus Operating reimbursement rate have also decreased by over 3%, according to the budget document.
Vice Chairperson Shanna Draheim expressed some optimism about the future, specifically CATA’s ability to try new things, but also nervousness about the next few years and the government’s investment in transit.
"We have to be investing in this to make sure that the 41% of people in the state who are below the ALICE threshold have access to fixed route and other transit options," Draheim said. The ALICE threshold refers to households that are Asset Limited, Income Restrained and Employed, also known as having the minimum income needed to afford basic necessities without federal assistance. "I think it's incumbent on all of us to be those champions."
