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3d ago

California, MTC Strike $590 Million Bridge Loan to Avert Bay Area Transit Cuts

The financing uses unallocated state rail capital awards with repayment secured by State Transit Assistance.

Morning commuters line up for a San Francisco-bound train at the Dublin-Pleasanton station. The lines there could be shorter if BART extends service to Livermore as long planned -- albeit a project about a decade from completion, if funding is found. (File photo)
Gov. Gavin Newsom and state officials have agreed to provide a $590 million loan to Bay Area transit agencies, including BART.

Overview

  • The agreement makes funds available by July 1, 2026 to sustain operations at BART, Muni, AC Transit and Caltrain through the 2026–27 fiscal year.
  • Terms include a 12-year repayment schedule with interest-only payments in the first two years and a variable rate tied to the state’s Surplus Money Investment Fund.
  • The loan draws on Transit Intercity Rail Capital Program awards that have been granted but not yet allocated, designed to protect existing capital commitments.
  • Transit agencies still face a combined operating shortfall exceeding $800 million next year, with BART projecting a $376 million deficit and preparing contingency plans that could include service reductions, fare increases and layoffs.
  • The deal serves as a bridge while backers seek to qualify a November 2026 regional sales-tax measure whose revenue would begin around mid-2027, and it is smaller than a previously cited $750 million pledge that did not materialize.