‘An ongoing effort’: GRTC faces potential $40 million funding shortfall by 2031

RICHMOND, Va. (WRIC) -- The Greater Richmond Transit Company (GRTC) is warning of a significant financial shortfall by 2031 — a gap large enough to force service cuts if new funding isn’t secured.

Internal financial projections show the agency’s reserves could fall from roughly $40 million to about $300,000 over the next several years. GRTC leaders say the outlook is serious, but not unique.

“This is in the transit world happening all across the state in various parts of the nation,” said Ashley Potter, a spokesperson for GRTC.

GRTC has added multiple service improvements in recent years — including new LINK micro transit zones, expanded route coverage and increased frequency on major corridors like the 7A and 7B. Ridership has grown with those expansions, topping more than 12 million trips last fiscal year.

But the growth comes with increasing costs. Labor, the agency’s largest expense, rose sharply after GRTC operators received a negotiated wage increase.

“Our operators, with their last collective bargaining agreement, it was between 30 and 40% increase," Potter said.

Because GRTC is publicly funded, not a private company with its own revenue stream, the agency relies heavily on state, local and federal funding — all of which shift from year to year. That uncertainty makes long-term planning challenging.

“We’re just kind of at the whim of what are the federal legislation currently happening… state formulas change,” Potter said.

GRTC leaders emphasize that they have been monitoring this projected “financial cliff” for months and are working now to mitigate the impact.

Potter added that the agency has already started planning for alternative revenue sources.

“We’ve always been proactive about it… that effort to look at those funding sources is consistently ongoing,” Potter said.

Potter said the agency expects it will need to use reserve funds over the next five years, but is focused on avoiding a major shortfall.

“So, yes, while we would be tapping into our reserve funds over the next, five years or so, there’s an ongoing effort to identify new funding streams to ensure that we’re not hitting, you know, this, this major financial situation,” she said.

Although the budget outlook has prompted concerns from riders, GRTC maintains that its Zero Fare program — which eliminates bus fares for all riders — is not directly tied to this financial challenge.

Potter told 8News that Zero Fare is funded separately through partnerships and sponsorships, not the same pot of money affected by the projected deficit.

GRTC officials said they will continue reassessing their budget year to year and work with regional partners to explore grants and other funding options to avoid service reductions.

The next several months and years will involve more financial planning as the agency prepares updates for its board and the public.