Two California public transit agencies, the Orange County Transportation Authority (OCTA) and Caltrain, have approved their respective fiscal year (FY) 2026 budgets.
OCTA Board approves $1.74 billion balanced budget
The OCTA Board approved a balanced budget of $1.74 billion for the upcoming fiscal year that begins July 1. According to the agency, the budget keeps essential transportation improvements moving forward while responsibly planning for a balanced and sustainable transportation future for Orange County.
The approved budget makes significant investments in public transit – totaling approximately half of the overall budget – and makes improvements to Orange County’s freeways and streets to keep the county moving safely and efficiently. The budget accounts for focusing on coastal rail resiliency and will continue to fulfill the promises of Measure M, the county’s half-cent sales tax for transportation improvements.
Overall, the FY25-26 budget is approximately a $20 million decrease compared to the previous year’s budget.
“I’m pleased to see OCTA move forward with a balanced budget that reflects both fiscal responsibility and a strong commitment to improving how Orange County moves,” said OCTA Chair and Orange County Fourth District Supervisor Doug Chaffee. “Thanks to the diligent work of our board and staff, we are continuing to invest in vital transit, street and freeway improvements that enhance mobility and quality of life for everyone who lives, works and visits Orange County.”
Key highlights of the FY25-26 budget include:
Expanded transit offerings
- Additional OC Bus service to meet increasing demand, back to pre-COVID-19 pandemic levels.
- Start of OC Streetcar revenue service activities.
- Continued support for Metrolink rail service.
Delivering on Measure M2 commitments
- Measure M2 Next 10 Delivery Plan programs and projects remain on track.
- Formula and competitive programs continue to support the needs of cities and the county.
Sustainable and resilient priorities
- Continued investment in zero-emission buses and supporting infrastructure, including seven additional zero-emission buses.
- Ongoing coastal rail resiliency planning and project implementation to protect vital transportation corridors.
Consistent express lanes operations
91 Express Lanes and 405 Express Lanes continue to meet performance and financial commitments.
A guarded economic outlook
- Anticipated softening of sales tax receipts.
- Uncertainties in state and federal funding.
- Preservation of healthy reserve balances to mitigate potential revenue fluctuations.
OCTA notes staff levels are scheduled to increase by about 31 employees – 27 of those coach operators to better serve the public’s public transit needs. According to the agency, 11 staff positions identified as having value for the agency will not be added at this stage but will be reconsidered if tax revenues are higher than expected during the fiscal year.
Measure M will continue to fund improvements to freeways – including SR-55, SR-57 and SR-91 – and to streets throughout Orange County, in addition to multiple transit and environmental programs. Transportation funds are provided to cities through formula and competitive funding.
The budget encompasses all services, projects and programs that are approved by the OCTA Board and administered by the agency.
Caltrain Board approves $260 million FY26 operating and capital budgets
Caltrain’s Board of Directors approved its operating and capital budgets for FY26 at the rail agency’s monthly board meeting.
The operating budget is nearly $260 million, with funds coming from fares, Measure RR, state SB 125 funding and utilization of state transit assistance carryforward funds. Caltrain identified $10.9 million in operating cost reductions compared to its earlier financial projections by reducing both labor and non-labor expenses. Caltrain notes the reductions were achieved while maintaining current service levels.
According to the agency, the balanced operating budget will continue to fund Caltrain’s electric service, running trains every 15 minutes at most stations during peak hours and half hourly service at all other times, including on the weekend. The agency continues to break post-quarantine ridership records, as April’s ridership saw a 60 percent increase over the same month the previous year, and weekend ridership is currently higher than it has been in the 161-year history of the rail corridor.
Caltrain’s FY26 $34.8 million capital budget will be funded through a combination of federal, regional and state grants, local funding and member agency funding. The capital budget focuses on state-of-good-repair and safety and includes funding for grade crossing safety improvements.
According to Caltrain, at the Broadway Burlingame crossing, three vehicles a week were turning down the tracks. After the installation of new artificial intelligence technology, solar markers, delineator posts and other cost-effective solutions, there have been zero incidents at the crossing. Similar safety investments are planned throughout the corridor.
Caltrain is projecting an average annual deficit of close to $75 million between FY27 and FY35. Without an injection of funding from a regional sales tax measure or other external sources, Caltrain will need to explore drastic service reductions, station closures and administrative cost reductions. According to the agency, the operational funding shortfall could be exacerbated by proposed cuts in California Gov. Gavin Newsom’s May revise budget, which would further reduce Caltrain’s operating funding through SB 125 in FY26 by $10.4 million.
The agency says it is reducing internal costs and exploring new revenue strategies to address the funding deficit, as well as working closely with regional and state partners to secure external funding. Caltrain’s base ticket fare will increase by 25 cents on July 1, in accordance with the board-approved fare policy. Caltrain is also working hard to increase ridership and revenues along with it by increasing marketing and promotion around special events, redesigning the GoPass Program and partnering with local cities to pursue land use and development policies that encourage transit use.
Additionally, Caltrain is pursuing opportunities outside of fares to generate revenue. The agency is also exploring charter trains for special events, advertising and naming rights prospects, solar and energy storage and leasing fiber optic conduits.
FY26 begins on July 1, 2025, and ends on June 30, 2026.
Brandon Lewis | Associate Editor
Brandon Lewis is a recent graduate of Kent State University with a bachelor’s degree in journalism. Lewis is a former freelance editorial assistant at Vehicle Service Pros in Endeavor Business Media’s Vehicle Repair Group. Lewis brings his knowledge of web managing, copyediting and SEO practices to Mass Transit Magazine as an associate editor. He is also a co-host of the Infrastructure Technology Podcast.
