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Transit Agencies Could Be Next Casualty of Credit Crisis

Transit agencies across the United States may need to find billions of dollars to repay investors as long-term financing deals disintegrate, a result of the global credit crisis that could eventually affect millions of commuters.

The recent collapse of insurance giant American International Group, which facilitated major financing deals between transit agencies and banks for about 30 transit agencies across the country, left many of those agencies without access to funding when it collapsed including agencies in Atlanta, Chicago, Los Angeles, San Francisco and Washington. The fallout could mean less money for new trains and buses at a time when ridership in many areas has been steadily climbing because of high fuel prices. Rob Healy, vice president for government affairs at the American Public Transportation Association, said some agencies could be forced to increase fares, cut bus routes and delay long-term capital improvement projects.