Transit Briefs: Caltrain, OCTA, State of California, DART, MDOT

Caltrain

Caltrain’s Board of Directors recently approved its operating and capital budgets for FY 2026, which begins July 1, 2025, and ends June 30, 2026, according to the railroad, which provides commuter service along the San Francisco Peninsula, through the South Bay to San Jose and Gilroy (see map, left).

The FY26 operating budget is nearly $260 million, Caltrain reported June 9, with funds coming from fares, Measure RR, state SB 125 funding, and utilization of State Transit Assistance (STA) carryforward funds. The railroad said it identified $10.9 million in operating cost reductions compared with its earlier financial projections by reducing both labor and non-labor expenses. These reductions were said to be achieved while maintaining current service levels, reflecting “Caltrain’s commitment to cost control and financial stewardship.”

Caltrain in September 2024 fully launched its electrified service with 23 Stadler Rail-built KISS bilevel EMUs (electric multiple-units), transforming the now 161-year-old corridor from diesel to electric power. The railroad runs every 15 minutes at most stations during peak hours and half hourly service at all other times including on the weekend. In October 2024, the first full month of electrified service, Caltrain carried 753,000 passengers, marking a 54% increase in ridership over October 2023. It saw ridership grow to more than a half million passengers in December 2024, a 41% increase over December 2023. Caltrain said that it continues to break post-quarantine ridership records. April 2025 ridership saw a 60% increase over the same month in 2024, and weekend ridership is currently higher than it has been in the history of the corridor.

Caltrain’’s FY26 $34.8 million capital budget is funded through a combination of federal, regional and state grants; local funding; and member agency funding. It focuses on state of good repair and safety and includes funding for grade crossing safety improvements, such as LiDAR and camera-based artificial intelligence systems.

Caltrain said it is projecting an average annual deficit of close to $75 million between FY 2027 and FY 2035. “Without an injection of funding from a regional sales tax measure or other external sources, Caltrain will need to explore drastic service reductions, station closures and administrative cost reductions,” it reported. “This operational funding shortfall could be exacerbated by proposed cuts in the Governor’s May Revise budget, which would further reduce Caltrain’s operating funding through SB 125 in FY2026 by $10.4 million.

“The agency is reducing internal costs and exploring new revenue strategies to address the funding deficit, as well as working closely with regional and state partners to secure external funding. Caltrain’s base ticket fare will increase by 25 cents on July 1, in accordance with the Board-approved fare policy. Caltrain is also working hard to increase ridership, and revenues along with it, by increasing marketing and promotion around special events, redesigning the GoPass Program, and partnering with local cities to pursue land use and development policies that encourage transit use.

“Additionally, Caltrain is pursuing opportunities outside of fares to generate revenue. The agency is also exploring charter trains for special events, advertising and naming rights prospects, solar and energy storage, and leasing fiber optic conduits.”

OCTA

The OCTA Board on June 9 approved a balanced budget of $1.74 billion for the upcoming fiscal year that begins July 1, which “keeps essential transportation improvements moving forward while responsibly planning for a balanced and sustainable transportation future for Orange County,” according to OCTA, the county transportation planning commission that is responsible for bus and rail transit, rideshare, environmental programs, active transportation, and express lanes and freeways.

According to OCTA, the approved budget “makes significant investments in public transit—totaling approximately half of the overall budget—and makes improvements to Orange County’s freeways and streets.” The budget , it noted, “accounts for focusing on coastal rail resiliency and will continue to fulfill the promises of Measure M,” the county’s half-cent sales tax for transportation improvements.

Overall, the FY 2025-26 budget is approximately a $20 million decrease compared with the previous year’s budget, which OCTA said reflects its “commitment to fiscally conservative and prudent planning.”

Highlights of the FY25-26 budget include:

• “Expanded Transit Offerings:
—Additional OC Bus service to meet increasing demand, back to pre-pandemic levels.

• “Delivering on Measure M2 Commitments:
—Measure M2 Next 10 Delivery Plan programs and projects remain on track.
—Formula and competitive programs continue to support the needs of cities and the county.

• “Sustainable and Resilient Priorities:
—Continued investment in zero-emission buses and supporting infrastructure, including seven additional zero-emission buses.
—Ongoing coastal rail resiliency planning and project implementation to protect vital transportation corridors.

• “Consistent Express Lanes Operations:
—91 Express Lanes and 405 Express Lanes continue to meet performance and financial commitments.

• “A Guarded Economic Outlook:
—Anticipated softening of sales tax receipts.
—Uncertainties in state and federal funding.
—Preservation of healthy reserve balances to mitigate potential revenue fluctuations.”

OCTA staff levels are said to increase by about 31 employees, 27 of which are coach operators. “Reflecting the cautious economic approach,” OCTA said 11 staff positions identified as “having value” will not be added but will be reconsidered if tax revenues are higher than expected during the fiscal year.

Measure M will continue to fund improvements to freeways—including SR-55, SR-57 and SR-91—and to streets throughout Orange County, in addition to multiple transit and environmental programs. Transportation funds are provided to cities through formula and competitive funding.

“I’m pleased to see OCTA move forward with a balanced budget that reflects both fiscal responsibility and a strong commitment to improving how Orange County moves,” said OCTA Chair Doug Chaffee, who is also the county’s Fourth District Supervisor. “Thanks to the diligent work of our Board and staff, we are continuing to invest in vital transit, street and freeway improvements that enhance mobility and quality of life for everyone who lives, works, and visits Orange County.”

In other news, OCTA recently unveiled the first Siemens Mobility S700 for its 4.15-mile OC Streetcar system, which is 92% complete and slated to launch next spring.

California

“State lawmakers have come up with a plan that offers temporary relief to Bay Area transit agencies on the verge of a fiscal crisis that could force drastic service cuts as early as next summer,” according to a June 10 report by KQED, an NPR and PBS affiliate in Northern California.

State Sens. Scott Wiener (D-San Francisco) and Jesse Arreguín (D-Berkeley) on June 9 said “the budget blueprint drawn up by Assembly and Senate budget negotiators would reverse a $1.1 billion cut in transit funding that Gov. [Gavin] Newsom proposed last month,” KQED reported. “The Legislature’s budget, which must be approved by next Sunday, would also provide as much as $750 million in interest-free loans to Bay Area transit operators who are staring down devastating budget deficits in the fiscal year beginning July 1, 2026.”

Over the past several months, the senators and Assemblymember Mark Gonzalez (D-Los Angeles) have “craft[ed] a transit relief package”; they acknowledge, however, that the “Legislature’s plan will provide only a temporary respite from transit agencies’ long-term budget problems,” according to KQED. “Those challenges arise mostly from the pandemic-driven loss of ridership and fare revenue and a downturn in tax receipts that bus and train operators rely on.”

“Our public transportation systems’ future is still far from secure, and they require greater engagement and prioritization from our leaders to avert disaster,” Arreguín and Wiener said in a statement. “Even with this one-time relief package, systems across the state continue to face large budget shortfalls that threaten devastating service cuts.”

Their plan, “which rejects the governor’s proposal to redirect $1.5 billion of revenue in the state’s cap-and-trade fund to Cal Fire instead of transit, will need Newsom’s approval to take effect,” according to KQED. “The governor’s office says it’s still reviewing the proposal.”

In a statement to KQED, San Francisco Municipal Transportation Agency Director of Communications Parisa Safarzadeh, said “that city officials will work with community members ‘to make sure this package is part of the final budget with the governor. We are working to make Muni more efficient and accountable, but our city’s economy cannot withstand the severe Muni service cuts that would result without this state support.’”

According to KQED, a Metropolitan Transportation Commission analysis “found that collectively, BART, Muni, AC Transit, Caltrain and Golden Gate Transit face a total deficit of $3.7 billion in the five fiscal years beginning in July 2026.” It noted that $2.9 billion comes from BART and Muni; both face “staggering shortfalls — $380 million for BART, $320 million for Muni — in fiscal 2026–27.”

Without a solution, “BART said that it might have to suspend service on two of its five lines, reduce service on those runs to just one or two trains every 60 minutes, shorten daily service hours and shut down some stations as a result,” KQED reported.

Wiener, Arreguín and Assemblymember Catherine Stefani (D-San Francisco), KQED reported, “are working with the MTC and officials across the Bay Area to craft legislation to authorize a November 2026 ballot measure that would aid BART, Muni, AC Transit, Caltrain and other operators.”

SB 63, which would impose “additional sales taxes in San Francisco, Alameda and Contra Costa counties to support day-to-day operations and to improve regional transit connections,” has passed the Senate “and will be taken up next by the Assembly Transportation Committee,” according to the news outlet. “The MTC has estimated that the sales taxes — a half-cent in Alameda and Contra counties and up to one cent in San Francisco — would raise up to $550 million a year.” It also would allow San Mateo and Santa Clara counties “to opt in to the ballot measure, a decision each county would have to make by Aug. 11,” KQED reported.

DART

The DART Board has unanimously approved the framework for an interlocal agreement (ILA) that will enable the transit agency to contribute a percentage of its sales tax to tax increment reinvestment zones created by its member cities “to revitalize certain areas within DART’s service area,” DART reported June 9. The framework, it said, was developed in collaboration with member cities “to stimulate more transit-oriented development, grow transit ridership, increase tax revenue, and leverage DART’s transportation services and facilities as an economic development asset.”

Tax increment reinvestment zones, also known as TIRZ or TIF Districts, are an economic development tool used by municipalities to reinvest tax revenue to fund infrastructure and revitalization projects in designated areas. The newly approved ILA framework, DART said, enables it to participate automatically in these zones “under clearly defined terms, ensuring that contributions support initiatives aligned with DART’s mission and public transit goals.”

“This framework provides a consistent, equitable approach that allows DART to support the economic development priorities of our member cities while preserving our financial integrity and service commitments,” DART President and CEO Nadine S. Lee said. “It reflects our belief in being a collaborative partner in shaping communities that are both transit-friendly and economically vibrant.”

“DART’s leadership in creating this new economic development tool for its member cities has been exceptional, “added Don Magner, City Manager of Richardson, Tex. “Their participation in our TIRZ will empower us to be more creative when competing for new developments and attracting new business to our community. We look forward to partnering with DART to strengthen and grow our economy and appreciate their willingness to engage on this important initiative.”

MDOT

MDOT on June 10 reported awarding $1.25 million under the first phase of the TOD Capital Grant and Revolving Loan Fund, which the Department launched in February. The grant program will help advance development projects near transit stations “that will spur economic activity and increase connectivity in communities across Maryland,” according to MDOT, which noted that the program also supports local jurisdictions and their development partners “seeking to build equitable and inclusive development” at sites that the state has designated for TOD.

MDOT worked with the State Highway Administration, Maryland Transit Administration, and Maryland Department of Housing and Community Development to evaluate grant applications and select the awardees.

This year’s awardees are: 

• Anne Arundel County ($750,000) for pre-construction of a new parking garage at the Odenton MARC Station. This new commuter garage is said to be “necessary to catalyze the mixed-use development at the train station by freeing up existing parking for development opportunities. Odenton Station is an integral part of the Penn Line Transit-Oriented Development (TOD) Strategy Plan, an effort to catalyze growth and further private investment along MARC’s busiest commuter rail line. The Department is in the process of selecting a development partner for the site.”
• Montgomery County ($250,000) for preliminary design and community engagement for Project Connect, which includes a new entrance, public plazas and other infrastructure investments at the North Bethesda Metro Station. These investments are slated to increase transit rider capacity, support pedestrian and bicycle safety, and enable development of the planned 1.9-million square feet mixed-use life sciences district atop the station.
• Baltimore City ($250,000) for a Wabash Avenue Multimodal Access Plan supporting connectivity to the planned development at Reisterstown Plaza Metro Station. This effort is slated to develop concept plans for the redesign of Wabash Avenue between the West Cold Spring Metro Station and the Reisterstown Plaza Metro Station. This will support access to current and future TODs, safe corridor travel for multimodal users and increased access to transit. Reisterstown Plaza Metro Station is the site of a mixed-use joint development project led by MDOT and Wabash Development Partners. 

A new round of funding will to be announced later this year. Eligible local jurisdictions can apply for up to $1 million for planning, design or public infrastructure improvements. Nonprofit or private development partners are eligible to apply in partnership with a local jurisdiction for up to $1 million in gap funding for projects within a State-designated TOD. More program details can be found here​.