Transit Fiscal Cliffs: Bay Area Votes on November 3 as the Federal Stopgap Cuts Transit Funding About 20%
On 3 November voters in five Bay Area counties decide on a sales tax to keep BART, Muni, AC Transit and Caltrain running. It would add half a cent in Alameda, Contra Costa, San Mateo and Santa Clara counties and a cent in San Francisco for 14 years, raising about $980 million a year against a combined operating deficit of more than $800 million a year. A poll found 54% support.
The vote comes as federal transit money shrinks. The 2021 infrastructure law’s funding expired on 30 September. The stopgap signed on 2 September extends highway and transit programmes to 11 December at prorated fiscal 2026 levels, but it doesn’t continue the law’s extra advance appropriations. By one analysis, that cuts transit funding about 20% and passenger rail by about four-fifths on an annual basis. The Capital Investment Grants programme, which funds new lines, is roughly halved.
How cities filled the gap
Big-city transit lost riders in the pandemic, spent its federal relief money and hit deficits in 2025 and 2026. Each region found its own patch.
- Chicago. Illinois passed a transit bill in October 2025, signed in December, providing $1.5 billion a year from redirected gas sales tax, a quarter-point sales tax increase in the Chicago area and other sources. The regional authority becomes the Northern Illinois Transit Authority.
- Philadelphia. Pennsylvania’s legislature didn’t pass new recurring money. Governor Josh Shapiro let SEPTA move about $394 million of capital money to operations, covering two years, and service cuts were reversed. A fare increase went ahead. SEPTA’s gap for next year is about $192 million, and lawmakers again missed the budget deadline.
- Bay Area. California passed a law in October 2025 allowing the regional measure now on the ballot.
New York and Washington
New York’s fight is with the federal government. In October 2025 the White House budget office froze about $18 billion for New York City projects, including the Gateway rail tunnel under the Hudson and the Second Avenue Subway. In June 2026 a federal judge permanently barred the Transportation Department from withholding Gateway grants. The administration has appealed. The MTA has sued separately over about $59 million in withheld Second Avenue Subway payments, and won its case over congestion pricing in March, which the department has also appealed. We covered why New York’s transit costs so much in an earlier post.
The reauthorisation
The House Transportation Committee approved its surface transportation bill, BUILD America 250, in May. It authorises about $580 billion over five years, with about $87.5 billion for transit, and changes the rules for capital grants. It hasn’t reached the House floor, and the Senate has no text. Another extension into 2027 is expected.
Why it matters
Federal money mostly pays for transit construction and vehicles. Operations are paid by fares and state and local taxes. As federal capital funding shrinks and operating deficits grow, the choice falls on states and regional voters. The Bay Area vote shows whether a region will tax itself to keep service running. The December reauthorisation shows what Washington is willing to pay for new lines.