California Transit's Fiscal Cliff

Caltrain finally delivers the kind of service the Bay Area has asked for: faster trips, better frequency, and a smoother ride after electrification. Then we hit the uncomfortable question: why is a transit fiscal cliff still approaching even with ridership coming back? We’re joined by Jonathan Cole from Climate Action California to unpack the numbers behind the looming operating deficit facing Caltrain, BART, Muni, and other Bay Area transit agencies and to explain why “the train looks full” doesn’t mean the budget works.

We trace the chain reaction from the pandemic to today’s work from home reality and how the loss of the peak commuter rush breaks the fare revenue model that used to subsidize service all day. From there, we get specific about what severe cuts could look like by 2027: longer waits, fewer lines, possible station closures, reduced weekend service, and major bus network reductions that would hit transit-dependent riders hardest. We also talk about why emergency loans can delay the pain while making the threat easier to dismiss, even as the structural problem remains.

Finally, we dig into the proposed fix: the Connect Bay Area Measure, a multi-county sales tax designed to provide stable, long-term transit operations funding, along with San Francisco’s additional measure to fully support Muni. If you care about reliable public transportation, traffic relief, and climate goals, this is the kind of local transit funding conversation that shapes what service looks like for the next decade. Subscribe for more transit deep dives, share this with a Bay Area friend, and leave a review with your take: would you vote for a dedicated transit sales tax?

Transcript

SPEAKER_02 0:52

A few weeks ago, we recorded an episode highlighting the successes of the Caltrain modernization efforts in the Bay Area. Everything from increased frequencies to faster trips and a better rider experience have gone from a plan to a reality. But one thing we neglected to mention is an issue we have covered in so many other U.S. cities on the show, a looming fiscal cliff for Caltrain. So this week we have a special guest joining us. Jonathan Cole from Climate Action California is here to break down all the details of how we're in this situation, what is at stake, and most importantly, what can be done to get this problem solved before service cuts are the only option left. Jonathan, thank you so much for joining us today. We are very excited to have you.

SPEAKER_01 1:32

Thank you. Are you happy to be here?

SPEAKER_03 1:35

Yes, Jonathan, thank you so much for being here. Um if we're just gonna jump right into this at a very high level, can you just give us an explanation of the problem that you highlighted when you reached out to us uh that Caltrain's facing and what other agencies in the Bay Area are currently facing?

SPEAKER_01 1:53

Yeah, well, this is Caltrain and pretty much all of the transit agencies in the Bay Area. And it's you know kind of a familiar story. It's the pandemic followed by work from home. So during the pandemic, of course, you know, ridership cratered, everybody's staying home, everybody's isolating. Then uh as we came back, especially in California and especially in the Bay Area, a lot of folks had shifted to work from home, and that's still a significant chunk of uh of commuters. So that means that there is less ridership in the morning. That doesn't mean that there's not ridership at other times of the day. I mean, you guys did a good job of highlighting Caltrain, how there's increased service on uh weekends, that uh during the day uh the trains are pretty busy, and it's what we've lost is that big commuter rush in the morning, the afternoon. And that was kind of helping to pay for service all through the day. So now we've got this great new service on Caltrain, electrified, it's fast, it's smooth, everything's great. And uh we've got increased ridership on weekends. As you mentioned, we've got a lot going on, but you still don't have that big commuter group in the morning and the afternoon that is subsidizing the fares for subsidizing the operations for everybody else.

SPEAKER_02 3:20

Right. I don't I'd imagine, you know, you mentioned this is in the Bay Area, and and like the work from home element of this probably hits even harder there with so many tech companies, where working from home for those companies feels almost more like an even more natural fit, basically. Um, you know, you've got a lot of software engineers and folks like that who can do all of this sort of stuff from home. And pre-COVID, a lot of those folks probably would have had monthly cards, uh, you know, monthly memberships or whatever for the transit, different transit services, depending on where they were living. Um but once you take all that away, and even if they're still going into the office once or twice a week, that's you know, only a fraction of the revenue that they would have been contributing into the system otherwise.

SPEAKER_01 4:03

Right. Yeah, it's just not uh making up for for the losses. I mean, before the pandemic, uh especially BART, which I write a lot, BART, uh you'd have folks who are going back home, say going east to the East Bay, they would actually get on the train going west, go west four or five stations, so that they could get on and be guaranteed to have a seat. So they would actually go farther out to get a seat because it got so crowded. It was jam-packed at Rice Hour. Now it is busy, but not packed the way it was before. So yeah, and uh with all the tech companies here, that is changing, but still it's a lot of uh the work from home is really cut into ridership.

SPEAKER_03 4:48

I think something we should probably uh clarify for anybody who watched that episode that we did on Caltrain, one thing that we highlighted was that the ridership on Caltrain has actually increased uh since the pre-COVID levels, but uh the issue that you were highlighting is even despite that increase in ridership, we are still facing uh a financial crisis even for Caltrain.

SPEAKER_01 5:11

Right. Caltrain, they're at about 75% of pre-COVID levels, which is way up from they were down to something like 20, 25 percent. They've come back up and better than BART, uh, that since the uh electrification, their ridership has taken notable spike upwards. BART is around just under 50% of pre-COVID ridership. Caltrain's up above 70%, and you can actually see that difference uh really started when Caltrain electrified.

SPEAKER_02 5:42

And so if this kind of fiscal cliff were to happen, uh you were kind enough to share some slides from a recent meeting from your organization. So I'm gonna read a little bit off of them. Um, of a couple of the transit agencies here. I mean, uh, we've got BART that would be, you know, running uh uh with 30% less of their operating budget, uh, 42% at Caltrain uh from their operating budget. These are not small numbers. This isn't a couple percent here and there. What would cuts like this mean for transit riders in the Bay Area?

SPEAKER_01 6:17

It would be really terrible. I mean, we're looking at uh BART is talking about cutting, they currently have five lines operating with each line having a train every 20 minutes. They'd be cutting back to three lines probably with only two trains per hour. They'd be closing stations, and uh they they put out a map and they kind of backed off a little and said, Well, we're not saying for sure those stations, but this number of stations. So there are whole line segments that would probably stop having service, and that is what happened in the middle of 2027 without additional funding, so that's coming up very quickly, and there's serious concern that BART at that level, you cut the service, you're gonna cut ridership, fares go down. This sir, the concern is that BART might actually have to stop revenue service at some point, which is it's the Bay Area without BART is kind of unthinkable. It's uh it's a major way that people get around the Bay Area. It is it's so important to have multimodal. We just had a freeway shut down for repairs weekend before last, and we didn't get the kind of traffic crunch that you might have expected, in part because a lot of folks were on BART. I was on BART that weekend, and you could see that there was a lot of extra folks there. It's just really important to have that. And same thing is happening with Caltrain, talking about cutting weekend service, cutting back to maybe one or two trains an hour at most. Uh Muni cutting something like 20 lines and cutting their service in half on the other lines. Just serious, serious implications all around the Bay Area.

SPEAKER_02 7:59

Yeah, I mean, but uh I was gonna say Bart Bart lines with uh once every half an hour service feels insane, not to mention, you know, needing to close down stations and whatnot. Sorry, Chris, I didn't mean to interrupt you there.

SPEAKER_03 8:14

No, it's fine. I was gonna say uh very similar thing, but also uh assumption on my part, this is not just related to rail. This would also be related to any other services that these transit agencies offer, including bus network connectivity, um, which is gonna have you know an even greater impact on people who are using the system who maybe aren't using rail. And there are people who are absolutely reliant on bus service as well in this region.

SPEAKER_01 8:39

Yeah, and those when I mentioned Muni 20 line, those are bus lines. Muni uh would be cutting back a lot of bus lines, cutting back service on their uh rail or streetcar lines. Um AC Transit is the big bus service in the East Bay, they're looking at major cuts as well. This is just all across the Bay Area.

The Connect Bay Area Sales Tax

SPEAKER_02 8:58

So now that we've uh got some of the bad news out of the way here. Now that we've done the doom and gloom part. Yeah, yes. Uh I guess what what is the the solution to this? So I mean maybe we're not, I mean, we're we're clearly not out of the doom and gloom yet, but what what are the solutions being proposed to try to solve this crisis? Because, you know, you said middle of 2027, I mean, that is 12 months away. That is not that is not far away uh from when these agencies will start to need to make these really difficult decisions.

Voter Sentiment And Measure Details

SPEAKER_01 9:31

Yeah, well, this is uh there are uh a couple of things that have been in the work for really a couple of years now. People have been looking at this, anticipating this, and the uh there the major solution is a sales tax measure. It's called the Connect Bay Area Measure. We're actively gathering signatures right now to put that on the ballot for this November. That involves five counties in the the Bay Area, San Francisco and all the cities around the South Bay area. And within those counties, it would be a half cent sales tax measure, except for San Francisco. San Francisco Muni, it's such a it's got more ridership than all of the other uh transit systems in the Bay Area. And again, a lot of that uh is buses, but uh they need an additional support, so it would be one cent in San Francisco, one percent sales tax. So this is going on the ballot in November, and that would provide funding to basically fill those gaps and enough to not any major that we're not talking about, like major new railroads or anything, just improvements in service, better coordination between transit systems, better signage, uh continuing programs like uh there's uh program provides half-rate fares for folks who meet certain income conditions, being able to continue those kinds of programs. We've got such good transit here in the Bay Area. I mean, you can always complain about there's not this or that, but overall it's a really good set of transit systems, and we're kind of poised as ridership is coming back up, it does continue to increase, but not enough. If we can get this passed, then the systems can stabilize and continue to improve. If not, we're looking at really grim scenarios.

SPEAKER_03 11:22

Yeah, I'm I was looking at the numbers and I was seeing the the one cent in San Francisco, the half cent and sort of the other regions. Um how do you feel people are going to react or are reacting to that proposed tax increase? I think, you know, anytime this is always on the national news, but anytime California is doing something and it's always related to taxes, it's already a fairly high tax state. What are you hearing from your side about, you know, from people when you mention this measure? Is it something people are open to? Or did they just think of this as, well, now I'm just paying a little bit more and I'm always paying a little bit more? You know, what's some of the sentiment around it?

SPEAKER_01 12:01

I think it it's across the board. I think there is a recognition of how important transit is for the Bay Area. So for a lot of folks, they say, oh, you know, if I buy a$70 pair of shoes, it's only gonna add 35 cents. That's not that much. And transit's really important. Even folks who don't take transit understand that it is keeping congestion off of our streets and highways. So there's a lot of support. And there are folks that you talk to say, look, taxes are already too high. I'm just not gonna go there. So we are you know doing well with the signature gathering, and assuming we get on the ballot, there the polling shows that there is probably support. We're hoping, you know, and things anything can happen between now and November, but we're seeing support at sort of 60% level. It needs 50% or more to pass in those five counties. So we are hopeful that we've got the level of support to really make this happen. And I should mention there is one other piece to this for San Francisco. For San Francisco, even the 1% only covers about half of the operating deficit. So there is a second measure on the ballot only for San Francisco, which is a parcel tax, and that's uh basically based just on the square footage of your property, and uh that's called the stronger uh stronger muni for all measure. And so between those two, the Bay Area Connect and Stronger Muni for All, those two together would provide enough for Muni. So you know it it is it's a big ask, but especially in San Francisco, people know how important transit is.

Why Loans Hide The Threat

SPEAKER_02 13:37

Right. I'll I'll add too on the the kind of one percent or half percent sales tax solution to this. Um, this is something fairly common in other places. I know uh where Chris is right now in Austin. Um, that's how Cap Metro, the transit agency there, that's their they're basically their primary source of of revenue for for the agency is a 1% sales tax. So even in, you know, to uh add to Chris's question a little bit, um, but just say like, you know, he mentioned, oh, California tax, tax, tax. Even in Texas, uh, they do this. So, you know, uh it's not uh a solution that's necessarily like a California idea or a Texas idea. It's something that just they do it in multiple places because it makes sense. Um, more reliable, steady income. Yeah. Um and and yeah, go ahead. Go ahead. Yeah, I was gonna say it kind of uh prevents the situation of like it's it's not a band-aid solution. It is a long-term solution having the sales tax revenue. It is much more reliable, um, and it's not something that you'll have to continue to go back to lawmakers or go back to a ballot measure to try to solve the problem again in the future.

SPEAKER_01 14:47

Yeah, I I should add this is a 14-year measure, so it would be in place for 14 years. That gives time to stabilize, improve transit, adapt to this new situation where it's not primarily computers, it's commuters. It's uh everywhere all the time, people wanting to travel during the day. Uh so also, I should point out California, unlike some states like New York or Illinois, doesn't provide significant support for local transit. They have provided transit loans, and one of the reasons that this fiscal cliff hasn't hit yet was that there's been a series of loans, first federal and then state. We just uh for this year got a$590 million loan to uh Bay Area Transit, and that was kind of pulling teeth to get that through. We had to end up going out and have a little protest at San Francisco City Hall to get that through. So some folks, because of these loans, don't realize that the how serious the threat is because transit's been going pretty well. One of our uh folks was gathering signatures and a guy got off Caltrain and says, Oh, they're not going to cut Caltrain service. Look, the train is full. The fact is, fares just don't cover the full operational cost, and that's why we need these other sources.

SPEAKER_03 16:05

That's a really good point. If you are being told constantly there's a fiscal cliff, but then there's always, you know, somebody coming in with a loan to float it for a little bit longer, you start to, you know, feel like maybe the transit agency is crying wolf, like, oh, they're always fine funding and we don't need this tax. But no, that is a very good point. These have always been temporary measures, and this is really meant to help stabilize, which is um definitely, definitely what you would want to see there.

SPEAKER_01 16:31

Yeah, and that that has been uh an issue. We've had some folks say, oh, they're exaggerating. They're they are you know, BART is you know showing this scenario to scare people, but they're not really gonna make these kind of cuts. The fact is, if you look at their board meetings, those the board members are trying everything they can to keep this running, and they are really reluctant to do these kind of cuts. And even as I said, pulled back a little bit on the scenario because they didn't want to overly alarm people, but the fact is the situation is potentially pretty alarming.

SPEAKER_02 17:03

Uh, while we're still on the specific kind of ballot measure, what can folks do who are in California or in the Bay Area who want to try to get involved to try to make sure that this actually gets passed?

SPEAKER_01 17:19

Well, uh, one thing they we are still uh for about another few weeks in the signature gathering mode. So if you go to it's connectbayarea.com, all one word. If you go there, there is a link at the top of the page to get involved. You can sign up for signature gathering, you can see events where signature gathering is taking place. If you don't want to gather signatures but want to contribute your signatures, you can go up and click on the events page, see where people are gathering signatures, and basically just go to one of those events, look for somebody collecting signatures. They also have uh professional signature gatherers, you know, usual thing outside supermarkets. Uh, I've seen several times just walking along the street, other folks who are part of the measure doing that. Then uh the other important thing is just talk to your friends, talk to other folks about how serious this threat is. As we move towards the November ballot measure, we need to have people really understand how vital this is for the Bay Area. So just talking about it.

SPEAKER_02 18:25

We'll uh we'll also make sure that those links are directly in the description of wherever you are watching or listening to this as well, so that you can find them nice and easy to try to get involved there.

SPEAKER_01 18:36

So thanks so much. Yeah. Yeah.

Climate Action California And Transit

SPEAKER_02 18:38

Absolutely. So I'm curious. Uh like it seems like uh Climate Action California kind of does all sorts of different things, and transit is one element of it. Uh, I'm curious if you could kind of describe how you got involved with Climate Cali Climate Action California um and you know why the organization has decided to put this focus on public transportation.

SPEAKER_01 19:02

Um I got involved. I uh my in my previous life, I taught physics and actually developed a course on climate change at a college in North San Diego County, retired, came up to the Bay Area, and uh I was looking for a way to maintain involvement with uh with climate. Climate change is just such an important problem, and uh found Climate Action California. We've got about 7,000 folks statewide and focus on legislative action. So there is uh going to uh hearings at the state legislature, supporting bills, looking at the regulatory agencies, just doing what we can to help keep California on track for its climate goals. And I've always been interested in transit. I think I was like 14. I went to Mexico City for the first time. I grew up in Denver, actually a suburb of Denver with very poor transit. And suddenly Mexico City, you could hop on the subway for at the time when peso, you could get any place. And that just blew me away. So I've always been a little bit of a transit fan, so it was kind of natural moving up here. Sold my car before I moved up here, so I get around exclusively on transit, and so that was my area of interest. Uh, I joined the transportation team and you know ended up leading the rail transit efforts here. So it's and that I got involved with a specific measure. There was actually a bill, there was a bill that was authorizing this. Uh SB63 went through uh the legislature, and I'd been tracking that and all the hearings and all the discussions that resulted in this measure. So that was how I got involved. For folks who are in California and are interested in being getting involved in climate action. Climate action California is it's a great organization, uh, covers a lot of different areas of climate, and uh you can uh always find your niche, your particular area of interest there. So I would definitely recommend it to folks who want to get more involved.

SPEAKER_03 21:02

Well, Jonathan, thank you so much for joining us today and explaining exactly what was happening with this measure and with all the systems in uh California. If you like this video, please feel free to subscribe, leave a comment if you uh want to get involved. Make sure you check out those links to climate action. This was actually an episode derived from comments from Jonathan. So we definitely uh read them and take them seriously. But with all that being said, thank you all so much for watching and enjoy the rest of your transit engine studies.