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Newsom Will Not Provide Stopgap Loan In Time to Prevent Cuts to Bay Area Transit, Lawmakers Say

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A BART train approaches a station on March 13, 2024. Lawmakers say the Newsom administration has told them it will not finalize a loan aimed at preventing steep service cuts for Bay Area transit agencies. (Martin do Nascimento/KQED)

Updated, 1:30 p.m. Sunday

Gov. Gavin Newsom’s office has signaled it will not provide stopgap funding for Bay Area transit agencies facing budget shortfalls before next week’s legislative deadline, according to lawmakers, raising concerns about steep service cuts to BART and other Bay Area public transportation.

State Sens. Scott Wiener, D-San Francisco, and Jesse Arreguín, D-Oakland, who have been negotiating the terms of a $750 million loan with the governor’s office, released a joint statement on Saturday responding to what they called the Department of Finance’s “decision to stop [the] Bay Area transit funding agreement.”

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“The Governor’s Department of Finance informed lawmakers it will not be finalizing a critical bridge loan to prevent serious service cuts to BART, Muni, AC Transit and other Bay Area public transit operators next year,” the senators said.

Wiener clarified in a call to KQED that the department has not stopped the funding agreement entirely, but merely seeks to extend talks.

“The Department of Finance has indicated that they want to keep working on it over the fall, potentially for action next January,” Wiener said. “And that’s a problem because if our transit systems don’t have confidence that the money and financial support are coming, they’re going to have to start making cuts to service and that would be terrible for the Bay Area.”

But Newsom’s Department of Finance pushed back on the idea that delaying the deal would lead to immediate service cuts, saying it was the department’s understanding that local transit agencies don’t need backfill funding until the middle of 2026 at the earliest. That, the department argued, still leaves time for the deal to be finalized next year.

Newsom and state lawmakers agreed to the loan earlier this summer and have been working ever since to finalize its terms. The legislature faces a Sept. 12 deadline to pass bills during this session.

“It’s essential that this loan happen,” Wiener and Arreguín wrote in the joint statement on Saturday. “The state needs to step up and ensure we don’t see debilitating service cuts at BART, Muni, Caltrain, AC Transit, and other operators.”

The senators have been working to put a regional funding ballot measure before voters during the November 2026 election. But even if approved, that funding would not begin until 2027 — the state loan was meant to help bridge that gap.

In the Saturday afternoon interview, Wiener declined to comment on the specifics of his conversations with state officials.

“There’s not a specific sticking point; this is about just having the will to get it done this coming week,” Wiener said.

In a statement, a spokesperson for the Department of Finance said the department hasn’t had enough time to review the legislature’s latest proposal.

“Although their need for financial assistance in the 2026–27 budget year has been known for months, the Administration only received an outline of proposed loan terms from the Legislature two days ago — still short of a legislative proposal that is necessary to resolve this issue,” the spokesperson wrote. “We’re committed to developing solutions that will support riders and transit agencies alike in a timely manner.”

BART officials have warned of drastic cuts without the temporary funding, saying they face a $350 to $400 million annual deficit beginning in the 2027 fiscal year.

“Were we not able to secure the $750 million temporary loan, we could see two of BART’s five lines cancelled. We could see stations closed,” BART board of directors member Edward Wright told KQED on Friday. “We could see a dramatic reduction in our service hours and a dramatic reduction in service frequency.”

Wiener and Arreguín pointed to a systemwide BART outage on Friday morning as an example of what residents might expect from a future with reduced services.

“Even on a Friday, when fewer people commute to the office, BART service shutting down meant our roads were choked with bumper-to-bumper traffic throughout the day, children and working people lost access to school and work, and our air got more polluted,” the senators said.

BART’s current financial troubles mirror those of other local agencies. Officials say emergency funding implemented in response to the COVID-19 pandemic will run out next year, but ridership rates never fully recovered as many employers embraced remote work.

For some transit agency officials, the larger concern is not the immediate potential cuts, but rather the cascading impacts down the road.

“The real fear is, aside from the degree to which that will provide an incredibly bad experience for people who rely on transit, it also could trigger what’s been referred to as a doom loop,” Wright said. “The worse our service becomes, the less people will want to ride it. The less people ride it, the less we’re gaining in fare revenue and the bigger our deficit grows.”

Clarification: This story has been updated to reflect new comments from state Sen. Scott Wiener clarifying that state finance officials have not fully ended talks over the bridge loan, but instead want to extend negotiations beyond this legislative session.

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