Caltrain’s Peninsula Corridor Joint Powers Board recently approved a long-term financial plan to address projected budget deficits if the agency does not secure additional external funding via a regional ballot measure.
The framework, which was approved at the board’s Thursday budget meeting, is highlighted by the intent to vastly reduce the agency’s operating hours and close many of the agency’s transit stations and segments if faced with a budget deficit at the start of the 2028 fiscal year.
For several months, Caltrain officials have warned the public about the severe implications of the agency’s current lack of external funding beyond the 2027 fiscal year. On April 2, the board projected annual budget deficits of roughly $75 million from the 2028 to 2041 fiscal years if the lack of funding continues.
The agency, which says it transports some three freeway lanes worth of passengers during peak operating hours, hopes to receive its needed external funding from the Connect Bay Area ballot measure on the November ballot.
The initiative aims to prevent major public transit service cuts across five Bay Area counties by imposing a half-cent sales tax in Alameda, Contra Costa, San Mateo and Santa Clara counties, and a one-cent sales tax in San Francisco. Approximately 7% of the measure’s funds would be allocated to Caltrain.
Service cuts loom without funding
As presented at the board’s meeting last Thursday, since the COVID-19 pandemic, Caltrain’s funding has suffered as the result of a decrease in ridership, an increase in general operating costs as a result of inflation, and costs from its new 51 miles of electrical infrastructure.
In the 2019 fiscal year, self-generated revenue from ridership accounted for close to 80% of the agency’s funding. In the 2026 fiscal year, that number fell to just below 30%, as the agency became reliant on funding from Measure RR — a one-eighth cent sales tax approved by voters in 2020 to provide Caltrain with its first dedicated funding source — and other external sources to avoid a deficit.
In late May, organizers of the Connect Bay Area initiative announced they had gathered 305,895 signatures, surpassing the roughly 186,000 needed to qualify for the November ballot. The measure will need a simple majority to pass.
In preparation for a no external funding scenario, Caltrain’s board adopted a framework that outlines the agency’s timeline for continued development of cost-saving measures. Through the summer and fall of this year, the board will finalize its budget planning, before initiating a six-month process of scaling back its service cuts at the start of 2027.
Assuming the agency remains without external funding, budget cuts would officially begin in the 2028 fiscal year. Potential service cuts could include a seizure of weekend, special event and late-night service, along with closures of more than one-third of Caltrain stations. If the budget deficit persists, the agency believes it will eventually be forced to suspend all Caltrain services.