Sacramento steps in with short term lifeline while Bay Area agencies close budget gaps: $590 million emergency loan
Bay Area, California – As the Bay Area’s public transit system continues to recover from the pandemic’s profound shocks, California is working to stabilize it. Governor Gavin Newsom recently has signed AB/SB 117, which gives a $590 million emergency loan to keep major transit systems functioning smoothly while plans for long-term funding take shape.
The law lets the California State Transportation Agency (CalSTA) provide the Metropolitan Transportation Commission (MTC) more money from the Transit and Intercity Rail Capital Program. The financial bridge is meant to help BART, Muni, Caltrain, and AC Transit rebuild ridership and deal with operating difficulties.
State leaders said the measure was both useful and essential. Officials stressed the importance of keeping service consistent because more than three million people use Bay Area transit every month.
They said that public transit connects people to employment, schools, and healthcare while also making the air cleaner and lessening traffic. Even though ridership dropped a lot at the height of the pandemic, the region’s operators have made real headway in getting people back on board.
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The loan is set up to be a short-term help as officials in the region look for a longer-term way to get money. Senate Bill 63 gives lawmakers the power to pass a potential regional sales tax measure in November 2026. If voters accept it, that initiative would start giving out new operational cash in July 2027. The emergency funding is aimed to help agencies close budget shortfalls and keep providing reliable service until then.
MTC will give the loan money to the four transit agencies to use for their operations, as agreed. CalSTA will be paid back in quarterly increments over 12 years, with just interest payments for the first two years. To make sure they get paid back, MTC must promise to use the money they get from the State Transit Assistance Program.
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The proposal has extra safety measures built in. CalSTA has been directed to work with MTC to prevent interfering with current capital projects. The California Transportation Commission will keep an eye on and report on project balances that haven’t been spent or allocated in the region. The interest rate on the loan is the same as the one on the state’s Surplus Money Investment Fund. This makes sure that the general fund doesn’t lose money it was expecting to make.
Alongside this legislation, the governor also signed AB 107, related to the Budget Acts of 2023, 2024, and 2025. The moves show that the state wants to stabilize transit service now while also setting the stage for a more stable financial future.
