While BART received nearly $2 billion in federal, state and regional emergency assistance for operating expenses since the start of the pandemic, this funding is projected to run out in spring 2026, according to the rapid transit agency that connects California’s San Francisco Peninsula with communities in the East Bay and South Bay.
BART said that a combination of cost controls and revenue generation helped it close the FY 2026 budget gap. Examples include:
- “A strategic hiring freeze while protecting safety and service quality.
- “Labor savings from reducing near-term retiree healthcare costs.
- “Non-labor budget reductions across all departments.
- “Running shorter trains.
- “Locked-in low renewable electricity rates.
- “Implementation of Inspector General’s recommendations for efficiencies.
- “Installation of Next Generation Fare Gates to reduce fare evasion and increase ridership.
- “Maintaining inflation-based fare increases [A 5.5% inflation-based fare increase took place on Jan. 1, 2025].
- “Offering new fare products like Clipper BayPass which is now revenue positive.
- “Improving transit coordination.
- “Growing ridership through station activations and events.
- “Negotiating new agreements for telecommunications revenues.”
The FY 2026 Preliminary Budget Memo, to be released at the end of March, will now show a balanced budget, BART reported.
Total operating expense growth in the FY 2026 budget is only 1% compared with Bay Area inflation of 2.7% over the past year, according to BART, which noted that its workforce size has been reduced from the current year due to the strategic hiring freeze. Even before the recent cost cutting, BART said it has been able to keep its operating costs below the rate of inflation since 2019.
“BART is one of the most cost-efficient rail operators in the nation despite operating in a very high-cost region,” the agency said. “By one measure, the cost per vehicle revenue hour, BART is significantly more efficient than similar systems like Washington, D.C.’s WMATA and Atlanta’s MARTA (Vehicle rail hour rates: BART $283; MARTA $370; WMATA $466).”
To address the structural deficit beginning in FY 2027, BART said it is working with the region’s transit operators, the Metropolitan Transportation Commission, and other stakeholders to pursue funding to address the “growing transit financial challenges,” most likely with a regional tax measure on the November 2026 ballot. (California State Sens. Scott Wiener [D-San Francisco] and Jesse Arreguín [D-Berkeley] on March 24 announced Senate Bill 63, the Connect Bay Area Act, that they said “strengthens and stabilizes public transportation in the Bay Area as funding shortfalls threaten devastating service cuts at BART, MUNI, Caltrain, AC Transit, and other systems.“ The funding measure authorized by SB 63 would appear as a sales tax in San Francisco, Contra Costa, and Alameda counties, with an opportunity for San Mateo and Santa Clara counties to opt in.)
Next Focus: ‘Long-Term Sustainability’
“We’re getting our budget in order to the extent that we can,“ BART Board President Mark Foley said. “Closing a $35 million gap is no easy task. Now that we’ve overcome the first hurdle, we’ll focus on the bigger picture of restructuring BART’s funding model for long-term sustainability.”
While BART said it is prioritizing “high-quality and frequent service” to attract more riders, overall, it is running 100 fewer trains per week than before the pandemic.
“As ridership continues to slowly grow, BART’s historical reliance on passenger fares to pay for operations, long seen as very effective, is outdated and no longer sustainable,” the agency said. “New sources of funding are needed to avoid significant service cuts.”
BART said it “can’t cut its way out of the crisis without causing a transit death spiral. That is because rail has high fixed costs to maintain infrastructure and low marginal costs driven by changes in service. For example, when BART closed at 9 p.m. and reduced frequencies during the height of the pandemic, it represented a 40% cut in service, but it only reduced operating costs by 12%. Even a 90% cut in service (9 p.m. closure, one-hour frequencies, and running only three of the five BART lines) would close less than half of the FY27 $376 million deficit.”
According to BART, a series of presentations at upcoming Board meetings will culminate in a Board of Directors vote in June to adopt a two-year budget for fiscal years 2026 and 2027.
Visit the BART Financials webpage for more details.
