$750 million deal to save Bay Area transit stalls
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Major service disruptions could become the new normal without state funding. Photo: David Paul Morris/Bloomberg via Getty Images
A $750 million loan to rescue the Bay Area's struggling public transit systems stalled Tuesday after lawmakers and Gov. Gavin Newsom's administration failed to reach an agreement by a key deadline.
Why it matters: Without the stopgap funding, BART, Muni, Caltrain, AC Transit and other regional agencies could face service cuts as their financial lifelines erode amid dwindling ridership and expiring pandemic emergency funds.
State of play: The loan, initially approved in the June budget, was meant to keep the agencies afloat until 2027 when funding from a proposed 2026 ballot tax measure — if approved by voters — would kick in.
The big picture: The funding delay injects uncertainty into an already fragile transit system. BART's paralyzing service meltdown last week — caused by a computer problem that left thousands stranded — offers a potential preview of what's to come: more disruptions that could soon become the norm.
Between the lines: Dozens rallied on Monday at Civic Center Plaza urging Newsom to strike a deal over the loan, which Mayor Daniel Lurie said he has had several conversations with the governor over in the past few days.
- "The governor has made it clear to me that he understands the importance of this," Lurie said at the rally.
By the numbers: Muni could see a 30% service cut and BART's could be as high as 90%, Laura Tolkoff, transportation director at the local think tank SPUR, told the Chronicle. That would mean having 500 BART trains per week rather than 4,200, she said.
Threat level: The cuts could also stall downtown San Francisco's recovery, considerably slow commutes and slash critical access for seniors, low-income riders and people with disabilities.
California's Department of Finance told legislators Saturday that due to a lack of clarity on repayment terms, the agreement wouldn't be finalized before Tuesday's legislative deadline — effectively stalling the deal.
Between the lines: State Sen. Scott Wiener, who has long championed public transportation, told Axios that Newsom's office is seeking to extend negotiation talks through the fall, though that delay could have devastating consequences as Muni faces a $322 million deficit next year and BART projects up to a $400 million annual shortfall by 2027.
What they're saying: "California is playing with fire — we need to get this done," Wiener said. "The most important thing is for the governor and Department of Finance to send a clear signal that this is going to happen because if our transit systems do not have confidence that money is coming, they will start scaling down service now in order to avoid chaos later.
- But I am optimistic that we'll be able to work through options in the next few months," he added.
What we're watching: Lurie is proposing a new parcel tax on homeowners to help plug SFMTA's budget gap.
What's next: "The administration is continuing to work with all stakeholders on the parameters of a funding deal with the goal of reaching agreement this fall," H.D. Palmer, a spokesperson at the Department of Finance, told Axios in a statement.