Breaking: Budget Deal Saves California’s Transit Systems, For Now

“California’s state budget will include a subsidy for BART, SFMTA and Bay Area transit agencies that could delay service cuts agencies warned would happen as early as fall as they approach massive financial deficits,” reports Ricardo Cano in a paywalled article for the San Francisco Chronicle.

“The budget deal struck by Gov. Gavin Newsom and Democratic legislative leaders Sunday night nixes $2 billion in cuts to transit capital projects that the governor proposed in January. Transit agencies will be able to ‘flex’ these preserved capital funds to pay for service costs,” according to the article.

The budget breakthrough came just a few days after S&P Global Ratings dropped the Bay Area Rapid Transit District’s credit two levels, to A+.

In addition to the flex funding for operations, California transit systems will receive $1.1 billion in state cap-and-trade program funding. Together, the funding is enough to delay a fiscal cliff that leaders at BART and Muni had predicted would arrive in 2025. Deep service cuts, however, could have started to take effect as early as this fall, according to Cano, who also reported in detail on the risks facing California transit systems in March 2023.

California is far from alone in needing to find long-term solutions to the transit funding gap—Washington, D.C.’s Metro has been threatened with a lower credit rating, for example, and New York City's transit systems are pinning their hopes for a long-term finding solution on a long-delayed and controversial congestion pricing scheme that would charge drivers to enter a large section of Manhattan.