The California state government will loan $750 million to Bay Area transit agencies, reviving a commitment that nearly broke down before the end of the Legislative Session.
Gov. Gavin Newsom announced a deal had been reached to provide four transit agencies with critical support, temporarily shoring up budget shortfalls until permanent funding can be secured. Officials are planning to place these funding measures on a November 2026 ballot, with voter approval making the money available in 2027. These agencies include:
- Bay Area Rapid Transit (BART).
- San Francisco Municipal Transportation Agency (SFMTA).
- Alameda-Contra Costa Transit (AC Transit).
- Caltrain.
The short-term financing will ensure these transit agencies won’t need to reduce service offerings over the next year. Agencies are facing a sudden depletion of funds following the conclusion of emergency programs developed to help supplement budgets during the COVID-19 pandemic. As the state works to return to pre-pandemic levels of ridership, programs that supported operations are being cut, creating shortfalls in the absence of reliable, permanent funding.
- BART projected that it would have shortfalls of $375 million per year beginning in 2027.
- SMFTA is facing more than $300 million per year in shortfalls starting in Fiscal Year 2026 through 2027.
- Caltrain estimated that it will contend with budget deficits of up to $75 million per year beginning in 2027.
- AC Transit noted it has a $41.5 million gap this year, with expectations of a four-year shortfall of $238 million.
With the deal secured, transit agencies will collaborate with the state government to develop flexible financial tools geared toward meeting operational needs, protecting service delivery and supporting fiscal reforms. Some of these solutions will revolve around establishing structured loans alongside other financial mechanisms with built-in repayment plans to facilitate agency operations and development.
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