An agreement has been reached between the Office of Governor Gavin Newsom, the California Department of Finance and the Metropolitan Transportation Commission (MTC) on a 590 million USD loan package for major Bay Area transit agencies.
The funding is intended to prevent planned service reductions across several networks during the 2026–27 fiscal year, which begins on 1 July.
The loan will support operations at AC Transit, Bay Area Rapid Transit (BART), Caltrain and San Francisco Muni. Together, the agencies face a projected operating deficit of more than 800 million USD next year, linked to lower fare revenues and longer-term shifts in travel patterns following the pandemic and increased remote working.
Under the agreement, the loan will be funded by 1 July 2026 using money already awarded but not yet allocated for Bay Area projects through the state’s Transit and Intercity Rail Capital Programme. Officials said the structure is designed to maintain existing commitments to capital projects while making funds available for operating costs in the short term.
Gov. Newsom said:California is following through in our support for Bay Area transit and the riders who rely on it every day. This agreement between my Administration and the Metropolitan Transportation Commission provides essential short-term financing to support Bay Area transit operations while the region works together on long-term funding solutions. Public transit is essential to our economy and to communities across California, and through continued partnership with regional and local agencies, we are delivering a more stable and reliable system – now and for the future.
The arrangement follows legislation passed last year under Senate Bill 63, which allows a regional funding measure to be placed on the November 2026 ballot in Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara counties. If approved by voters, the measure would introduce a temporary 14-year sales tax to support transit operations. Revenue from that tax would not be expected until mid-2027, leaving a funding gap that the loan is intended to bridge.
According to details released by MTC, the loan will have a 12-year repayment term, with interest-only payments required during the first two years. Repayment will be secured by the revenue-based share of State Transit Assistance funds allocated directly to the agencies. The interest rate will be variable and linked to the state’s Surplus Money Investment Fund rate.
Sen. Wiener said:Today is a huge win for Bay Area transit and for both transit riders and drivers. For the past year, we’ve worked hard to craft a bridge loan to ensure BART, Muni, Caltrain and AC Transit are not forced to enact massive service cuts — potentially going into a death spiral — as we build toward a regional revenue measure to stabilise and strengthen these systems for the long run. I’m proud of our work with regional stakeholders and the Governor to make this loan a reality.
Public transportation is part of the Bay Area’s lifeblood, and we must do everything in our power to strengthen it and protect it from service cuts. So many Bay Area residents rely on transit to get to work, school, or family, and service cuts would also explode traffic congestion. We must not let this happen, and we won’t let it happen.
