CA: Long-term funding for Bay Area transit agencies a step closer to ballot after Legislature's OK

Bay Area residents could be asked to approve new taxes to save BART, Muni and other transit agencies from financial collapse under a bill state lawmakers approved Friday.

The fate of the measure now rests with Gov. Gavin Newsom, who faces an Oct. 12 deadline to approve or veto it.

The bill enables leaders in five Bay Area counties — Alameda, Contra Costa, San Francisco, San Mateo and Santa Clara — to authorize a sales tax measure on the ballot in November 2026 to fund public transit for 14 years. The default tax rate is set at one-half cent, with the exception of San Francisco, where it would be set at 1 cent to provide additional support for Muni.

State Sen. Scott Wiener, D- San Francisco, who sponsored the legislation with state Sen. Jesse Arreguín, D- Berkeley, hailed the bill's passage as a critical step in securing long-term funding for local public transportation systems.

"Keeping our trains and buses running frequently and reliably is essential for the future of the Bay Area," Wiener said in a statement touting the bill's passage. "I'm grateful to see this incredible coalition from across the Bay Area come together to ensure our transit systems are financially stable and able to provide improved service for our residents."

The bill also includes accountability measures requiring transit agencies to cut costs to receive further funding. Transit agencies have faced a deepening financial quandary in recent years, with slumping ridership during the pandemic failing to recover amid the rise of remote work and with COVID emergency funds drying up. Muni faces a $322 million annual deficit, and BART projects a funding gap of $375 million to $400 million a year beginning in 2027.

Without funding to stabilize the agencies, transit advocates warn that Bay Area residents could see devastating cuts to service. BART may have to close stations and limit train service to once an hour, while Muni could face a 50% reduction in frequency on many lines, the agencies say.

With fewer trains and buses, freeway traffic would be likely to spike, with commute times increasing by 10 hours a week on key routes between the East Bay and San Francisco, lawmakers have warned.

But adequately funding Bay Area transit agencies is likely to be a long and complicated slog, advocates warn. First, they need Newsom to sign SB63. Then, they'll need to collect enough signatures to sponsor the measure and put it on the ballot. While most tax hikes require a two-thirds majority from voters to pass, supporters of the measure are relying on citizen groups to sponsor it so it needs only a simple majority to pass. Polling shows that voters would approve the measure if it were on the ballot today, transit advocates say.

"This is a huge step," said Carter Lavin, co-founder of the Transbay Coalition advocacy group. "It will create a bedrock foundation for Bay Area transit for years and years to come. It took a lot of work to set this up, now we have to actually do it."

Even if voters approve the tax measure, transit agencies have a more immediate and pressing problem: surviving until tax dollars triggered by the new law start would start flowing in. Earlier this year, lawmakers and Newsom agreed to a $750 million bridge loan — contingent on details about how and when the money would be paid back — to tide the agencies over until SB63's passage.

But the legislative session ended without lawmakers formally approving the loan, with Newsom's staff members saying the matter could be tabled until January.

"Unless we can clear all of those hurdles, the Bay Area faces catastrophic cuts to the transit system," Lavin said. "So this is a key time for people to get loud and involved to save the network that keeps us connected and going."

Sebastian Petty, senior transit policy advisor at local think tank SPUR, said passage of the measure is "absolutely essential" to the region's economy, environment and quality of life.

"We are immensely grateful to Senators Wiener, Arreguín and the California State Legislature for the passage of SB 63, the Connect Bay Area Act," he said in an emailed statement. "This bill will give Bay Area voters in five counties the opportunity to sustain and improve transit systems that move millions of people."

BART spokesperson Alicia Trost hailed the legislation as a "historic opportunity" to preserve and improve transit and said it would benefit the Bay Area's entire transit network. BART will continue working to reduce costs to address the agency's steep budget, she said.

San Francisco Municipal Transportation Agency officials said in a statement that the measure's passage would protect essential Muni service and equip the agency with resources to continue investing in its infrastructure, safety and accessibility.

Agency officials acknowledged a looming budget shortfall despite recovering ridership and said they are trying to tackle the impending fiscal crisis "from every angle."

"We know more is needed to keep Muni service and programs," the statement said, "and move boldly towards a faster, cleaner, and more connected transit system that our customers count on. The SFMTA is committed to working with Mayor Daniel Lurie, Governor Newsom, and our local and regional partners to secure the future of public transit in San Francisco and throughout the Bay Area."

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