BREMERTON – Kitsap Transit will get more than $13 million in federal funding to help keep buses and ferries running while the agency grapples with a steep decline in ridership and sales tax revenue due to the coronavirus outbreak.

The funding is a small slice of the $25 billion allocated to transit agencies across the country in the federal coronavirus relief package passed by Congress last month. Transit agencies in the Puget Sound region – including Kitsap, King, Pierce and Snohomish counties – collectively received $538 million in CARES Act funding.

It’s a shot in the arm for Kitsap Transit, which has seen a precipitous drop in bus and ferry ridership since early March. But the total impact of the economic crisis is still unclear.

“It’s basically going to keep us operating while we figure out what the long-term effect of this is going to be,” Kitsap Transit executive director John Clauson said.

Kitsap Transit is anticipating a large hit to its sales tax revenue for March. Just how much won’t be clear for some time, Clauson said, because the state takes a few months to pay out sales taxes to transit agencies. But early projections estimate Kitsap Transit could lose anywhere from $6.6 million to $15.5 million in sales tax revenue. The ferries, which are funded by a separate sales tax, could lose between $2.5 and $5.8 million. Sales tax makes up nearly 90 percent of Kitsap Transit’s revenue base.

Ridership has also dropped significantly. Last month, Kitsap Transit cut bus service by 35 percent and stopped collecting fares on buses and ferries.

While the CARES Act funding will help offset Kitsap Transit’s sales tax shortfall, it likely won’t cover the additional coronavirus-related expenses like extra cleaning crews, paid family and sick leave, and protective equipment.

“The thing I'm grateful for is that because this is unchartered territory, we've never been here before with this, that it's going to allow us to keep operating while we figure the long-term effects, and how long is that term,” Clauson said.

How much the federal funding will help depends on how soon the economy can get back up and running, said Justin Leighton, executive director of the Washington State Transit Association.

“I think that it’s too new, and that’s why we consider this one of multiple phases that Congress can do to alleviate the pressure,” Leighton said.

The federal funding can be used to cover operational expenses dating back to Jan. 20, pay administrative leave for transit workers, purchase personal protective equipment or cleaning supplies, or for capital projects.

It’s not clear yet if the money can be used to shore up lost sales tax revenue, something WSTA is pushing for.

“I’m arguing that we make it flexible,” Leighton said.

The federal funding will be a boon to transit agencies in Washington, but more will be needed to return service levels to pre-pandemic levels, Puget Sound Regional Council director Josh Brown said. PSRC distributes federal transit funding to local agencies.

“We're still in the middle of this crisis, all indications (are) that even if sometime in May we begin to reopen the economy this is probably going to be a slow roll,” Brown said.

For Kitsap Transit, the damage depends on the severity and duration of the recession.

In a presentation to the Kitsap Transit board of commissioners Tuesday, finance director Paul Shinners outlined three different scenarios – how the agency would fare in the event of a 15%, 25% and 35% dip in sales tax revenue for the rest of the year.

Using the CARES Act funding and the $4 million in Kitsap Transit’s reserves, the agency should be able to sustain a sales tax hit of about 25 percent through the end of 2020, Shinners said.

Beyond that, Kitsap Transit’s financial picture is murkier. Compared to the 2008 financial crisis, the economic downturn brought on by COVID-19 has been much more sudden and severe. It’s not clear right now what recovery will look like, Clauson said.

Even after restrictions are lifted, riders will likely be slow to return to public transit. Some employers may opt to continue to take advantage of teleworking.

“It's trying to predict what's going to happen, how quickly the economy will come back, how quickly confidence levels in riding public transit will come back,” Clauson said.

Kitsap Transit implemented a hiring freeze last month and has not laid off any employees. As restrictions are lifted, Kitsap Transit’s goal is to get the public transportation system back up and running as quickly as possible.

The agency has also been going through its budget to look for savings. One potential expense that could be cut is the fast ferry reservation system, which costs about $85,000 a year. In a worst-case scenario, Kitsap Transit could use about $10 million slated for the construction of the Silverdale transit center to sustain operations.

“Worst comes to worst, we delay construction projects and reassign that money,” Clauson said.