Bay Area Transit Faces Crisis: Funding Solutions Urgently Needed
Bay Area transit agencies, including Muni, are confronting a significant financial crisis, with projected deficits threatening essential services. During a recent rally in San Francisco, protesters highlighted stark potential scenarios, including the closure of BART by 21:00, reduced train frequencies, and substantial job losses. The urgency of funding these agencies has never been clearer.
On March 15, 2024, Governor Gavin Newsom announced a $750 million loan to support public transportation across five Bay Area counties. This funding is intended to assist agencies like Muni, which faces a projected deficit of $307 million beginning in June 2026. Nevertheless, this loan will not cover all expenses, leading to difficult decisions ahead.
Bree Mawhorter, Chief Financial Officer of the San Francisco Municipal Transportation Agency, emphasized the challenges during a recent budget presentation at City Hall. “How do we solve that the regional measure alone is not enough to close the long-term deficit?” she questioned, underscoring the complexity of the situation.
To address the funding gap, San Francisco Mayor Daniel Lurie has proposed a parcel tax, which would require voter approval in November 2026. Additionally, voters will be asked to consider a half-cent sales tax at the same time, expected to generate around $1 billion annually for transit agencies, including Muni, BART, AC Transit, Caltrain, and SamTrans.
Muni’s financial struggles stem from various factors, notably a decrease in ridership. As of March 2024, ridership levels reached only 76 percent of pre-pandemic figures, resulting in lost revenue. Furthermore, over 60 percent of Muni’s budget is allocated to labor costs, with salaries and benefits rising each year. Mawhorter noted the necessity of cost-of-living increases for employees in an area with a high cost of living.
To mitigate financial strains, the San Francisco Municipal Transportation Agency has implemented several cost-saving measures. Over the summer, certain routes were cut or altered, leading to savings of $7 million. Increased enforcement of parking regulations generated an additional $18 million in revenue.
Despite these efforts, Muni is grappling with fare evasion, which has risen significantly since the pandemic. Before the pandemic, about 12 percent of riders did not pay their fare; as of March 2024, this figure increased to approximately 20 percent. Muni’s all-door boarding system has complicated enforcement, as riders can enter through any door, making it easier to avoid paying.
In response, Muni has ramped up enforcement efforts, resulting in a reported 30 percent decrease in observed fare evasion. Yet, the funds recovered represent only a fraction of what is necessary to close the budget gap. Mawhorter warned, “Anything that we cannot fill with revenue by definition has to be filled with cuts.”
As the Bay Area faces these pressing financial challenges, the future of public transportation hangs in the balance, making the upcoming votes on funding measures critical for the survival of essential transit services.
