Transit Teetering: $$$ Future Funding

By Howard Wong, AIA

🚌 $750 million: To loan or not to loan? Of immediate concern is that while the State Legislature’s June budget had included an agreement on a transit-lifeline loan of $750 million to help Muni, BART, Caltrain and other transit systems through November 2026, when transit funding measures would appear on the ballot, the Governor’s office appeared to be reneging on the loan.

Lobbying by Bay Area political leaders reopened negotiations on loan terms in the next months (interest rates, repayment terms, possible concessions/ reforms), for Legislative approval in early 2026. Without confidence in a new funding stream, transit agencies would be forced to gradually reduce service. As federal/state transit relief funds run out, annual structural deficits are looming: Muni $320M/year ($430M/ year by 2030); BART $350M/year; Caltrain $57M/year. Muni could cut service
frequency by 50%, eliminate bus lines, end fare subsidies, and stop service after 9pm. BART could cut service by 65%-85%, and cut two of its five lines.

🚌 Regional Transit Funding on November 2026 ballot. California Senate Bill 63, passed by the Legislature and signed by the Governor, enables a sales tax measure for five Bay Area counties. If approved by voters, San Francisco could levy an additional sales tax of 1%, and Alameda/ Contra Costa/ San Mateo/ Santa Clara an additional 0.5%, for the next 14 years. New tax revenue would be shared by the SF Metropolitan Transportation Agency (SFMTA-Muni), BART, AC Transit, Caltrain, SF Bay Ferry and Golden Gate Transit. The measure has proactive language, requiring transit agencies to improve financial efficiency, rider experience, regional transit integration, and implementation of the MTC Transit Transformation Action Plan.

The best chance for success is to place the measure on the ballot via signature-gathering.  SB 63 creates a five-county special district to enable the regional measure on the ballot, with an option for a voter-initiative process requiring only a simple majority (50% + 1) to pass, rather than the two-thirds vote needed for a tax placed on the ballot by a government agency. But even if passed, the estimated $1 billion in new annual funding would be insufficient to cover total structural deficits in all regional
transit agencies.

🚌 San Francisco Parcel Tax Measure on November 2026 Ballot. Augmenting the Regional Transit Funding Measure, SF Mayor Lurie is proposing a parcel tax measure on the SF ballot – potentially generating $85 million annually to further stem Muni service cuts. A parcel tax is a usually flat fee charged to property owners – though it could vary according to the size of the property. Specifics regarding the tax rate, exemptions, and structure are in the works.

The mayor sees robust transit as key to revitalizing downtown. The planned ballot measure includes reforms for Muni accountability and reliability.  Muni Now, Muni Forever has created an alternative ballot measure proposal which they have pitched to the mayor.  Find out more here or at a rally Monday, December 8 at 12 noon on City Hall steps.  A parcel tax measure normally requires two-thirds voter approval but a citizens’ initiative (via signature-gathering) would only need 50%+1 voter approval.

🚌 Possible new local tax on ride-hailing companies and high-end CEO pay. Four members of the SF Board of Supervisors are considering such a ballot measure; specifics are in the works. If the measure does not set aside money for a specific use such as transit, it would only need 50%+1 voter approval – but the revenue could be used anywhere.

🚌 Now what? Two transit and other funding measures (local, regional, state) on the same ballot pose political risks. And large transit service cuts pose their own, socioeconomic risks.

SFMTA can’t wait. More ongoing budget cuts? Even as transit ridership and return-to-office numbers are growing, increasing fare revenues, SFMTA may need to address current budget shortfalls by implementing new 5%-7% cuts across all divisions. If November 2026’s ballot measures were to pass, funding would not be
available until 2027 – and even then, Muni could still have some remaining budget deficits. SFMTA has already enacted efficiencies, delayed projects, cut mid-day service frequencies, trimmed five bus routes, raised fares/fees, frozen hiring, eliminated vacant positions, laid off top managers…SFMTA will be holding workshops, seeking new funding sources and tolerable cuts.

🚌 Regional transit agencies have to be proactive: Improve service, get the word out. A groundswell of transit support is happening – but non-transit users and tentative taxpayers need to be engaged, to become aware that robust public transit helps all of us, from cleaner air and better health outcomes to lower traffic congestion. The good news is that a transit advocacy coalition has arisen, made up of diverse people and groups across the political spectrum and region.

But the most powerful influence lies within the capabilities of transit agencies, as they demonstrate their transit/transportation expertise and innovative managerial skills. Transformative transit can arise from regional integration/coordination among the 27 Bay Area transit agencies and 151 transit-related planners and providers. Best practices from around the world can be applied, such as shared resources, seamless transfers, wayfinding, aesthetics, design quality, service reliability, low-cost transit fundamentals. The result will be higher regional transit mode share- signifying that more people are choosing public transportation over private vehicles. And that’s the ultimate goal.

RIDE PUBLIC TRANSIT: TaTTT: Take a Transit Trip Today. Everywhere; all over the Bay
Area. For instance, ride neighborhood bus routes, like the Muni 39-Coit Bus to boost ridership and revenue numbers. Muni is one of the country’s most robust transit systems; explore culture, history, and neighborhoods. BART, Caltrain, ferries and buses connect unique regional destinations and events. See you onboard!