California Gov. Gavin Newsom signed legislation that authorizes a $590 million loan to the Bay Area Transit into law this week.
The legislation, AB/SB 117, would allow the California State Transportation Agency (Cal/STA) the ability to loan $590 million to the Metropolitan Transportation Commission (MTC) from the Transit and Intercity Rail Capital Program (TIRCP). The loans will support and stabilize Bay Area transit services as the region continues to recover from the impacts of the COVID-19 pandemic, and ridership continues to rebound.
“California is stepping up to support Bay Area transit—this agreement will help protect transit service for more than three million monthly riders,” Newsom said. “The benefits of a strong transit system are clear: growing ridership, cleaner air, and less congested roads. I’m proud of the progress the Bay Area transit service and operators are making on ridership recovery, and this loan will continue to build on that success as the region works together on long-term funding solutions.”
The loan will help BART, Muni, Caltrain, and AC Transit maintain reliable service as the region works toward long-term funding stability, officials said. Additionally, the loan will ensure transit service for hundreds of thousands of riders in the region while officials work toward a November ballot measure.
MTC will use the loan proceeds to provide short-term operating loans to the Bay Area transit operators and repay the loan in quarterly installments to CalSTA over a 12-year period, with interest-only payments the first two years. The legislation require MTC to secure repayment of any loan issued by CalSTA by pledging the State Transit Assistance Program revenues, and directs CalSTA to work with MTC to ensure there are no impacts on existing capital projects.
“Our public transit connects people to jobs, schools, healthcare and opportunity,” California Transportation Secretary Toks Omishakin said. “This $590 million emergency loan helps ensure Bay Area communities continue to have reliable service as ridership returns and the region works towards a long-term funding solution. We’re committed to keeping transit strong for the riders that depend on it every day.”