Bay Area Transit Funding: $750M Loan Back on the Table! (2026)

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On Monday morning, Mayor Daniel Lurie announced at a rally that a $750 million emergency transit funding loan pledged by the state of California and subsequently curtailed is, once again, in play.

It remains unclear why the loan, which was approved and allocated for in the June State budget, is in flux.

“Since Thursday we have been in hourly, and I mean hourly, communication with the Governor and his office to reach an agreement where everyone wins,” said Lurie, during a rally at Civic Center Plaza. “The Governor has made it clear to me that he understands the importance of this.”

Dozens gathered to urge the governor to secure the $750 million, including many public officials, transit advocates and labor representatives. Several stood in scrubs holding a cardboard 38 Geary Muni bus, connected to an IV drip. “If you’re going into a fight, you want advocates with a sense of humor and some artistic abilities, and we got that,” said Board President Rafael Mandelman.

The governor’s office also issued a brief statement: “We are working closely with all stakeholders on the parameters of a funding deal. Our shared goal is to agree on the terms of a deal by this fall.”

Neither Lurie, nor state Senator Scott Wiener, who also spoke at the rally, specified what the holdup is. On and off the record, Bay Area politicos were confused by the on-again, off-again nature of the promised funding, and mystified. Still, they remained hopeful that an agreement would be reached.

“I thought the loan was dead,” said Wiener. “I think we may have put it back onto life support,” he added.

Last week, the governor’s office and the state’s Department of Finance informed Bay Area lawmakers that the promised loan would not be provided for by the end of the legislative session this week. When reached out for comment, neither department provided further information.

According to state legislation passed in June, the $750 million loan is cemented into the budget, but the duration and terms of the loan are to be determined in separate “budget trailing” legislation — that is what is currently under negotiation.

“I am hopeful, but the terms of the loan also really matter,” said Laura Tolkoff, the transportation policy director at SPUR, an urban planning think tank.

Two of the agencies that would benefit from the cash infusion, BART and the San Francisco Municipal Transportation Agency, face massive structural deficits. The loan would prevent either agency from cutting service, and act as a stopgap until more funding is secured through tax revenue. That’s conditional, however: Voters must approve revenue measures in 2026.

According to advocates, should the funding fall through, the SFMTA may have to cut Muni service frequency by 50 percent, eliminate service after 9 p.m. and cancel fare subsidies. BART would also cut service, by an estimated 65 to 85 percent.

“I came here mystified this morning,” said Assemblymember Catherine Stefani. “I can’t believe that this is not yet done, or that they’re not at the table doing everything they can to do their job.”

Stefani added that legislators did their job in finding room in the state budget to allocate the stopgap funding. She also expressed frustration with her own party, given that the state has a Democratic governor and a supermajority in the state legislature.

District 6 Supervisor Matt Dorsey emphasized that sentiment. “I expect better of Democratic leaders,” he said. “I would expect chaos and uncertainty from the Republicans in Washington — but with the eyes of America on our city and our state, let’s show them how Democrats can govern equitably so that we’ve got transit and paratransit and all the economic opportunities.”