California Gov. Gavin Newsom, the California Department of Finance and the Metropolitan Transportation Commission (MTC) announced they have reached an agreement on a $590 million loan for Bay Area transit agencies.
The agreement will prevent service cuts at AC Transit, BART, Caltrain and SF Muni during the 2026-2027 fiscal year, officials said. The transit agencies face a total projected deficit of more than $800 million in the fiscal year that starts on July 1. The new agreement, Newsom said, will sustain operations for transit operations used by transit riders across the region.
“California is following through in our support for Bay Area transit and the riders who rely on it every day,” Newsom said. “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 agreement would authorize the loan be funded no later than July 1, and would use money awarded by not yet allocated for projects in the Bay Area that are funded by the California Transportation Commission through the state’s Transit Intercity Rail Capital Program (TIRCP).
“MTC greatly appreciates the time and energy the Department of Finance and the Governor’s office put into this loan negotiation,” Commission Chair Sue Noack, who also serves as mayor of Pleasant Hill. “It was critical to reach agreement on funding that would avert major service cuts this year while also protecting the Bay Area’s priority capital projects and this agreement does just that.”
The loan agreement includes a 12-year repayment term, with interest-only payments during the first two years, secured by the “revenue-based” portion of the State Transit Assistance (STA) that goes directly to the transit agencies.