Caltrain and BART to get bridge loan

Newsom signed AB 117, allowing the California State Transportation Agency to loan $590 million to the Metropolitan Transportation Commission, the body responsible for planning and financing the Bay Area’s public transit system.

The $590 million bridge loan is meant to help the transit agencies continue operations and avoid service cuts as they await potential long-term funding via Senate Bill 63, a sales tax ballot measure going before Bay Area voters in November.

The ballot measure would implement a half-cent sales tax in several counties, including San Mateo, for 14 years and help major transit agencies close their shortfalls. Caltrain is projecting a $75 million annual deficit and BART estimates a $350 million to $400 million deficit each year.

He signed the bill alongside numerous public transit leaders and state politicians including state Sen. Scott Wiener, D-San Francisco, state Sen. Josh Becker, D-Menlo Park, state Assemblymember Lori Wilson, D-Suisun City, and state Assemblymember Liz Ortega, D-Hayward.

“This bill provides flexibility while local leaders consider long term solutions and engage stakeholders and constituencies,” Wilson said in a speech. “Today’s signing reflects our commitment to protecting essential services and strengthening regional partnerships.”

However, even if the November ballot measure passes, the funds won’t be available until at least 2027, making the bridge loan critical for maintaining service in the meantime, some transit leaders have said.

“We have an operating funding problem,” Wiener said. “If we don’t do anything, if we just let inertia set in, we’re going to lose our public transportation systems. We’re going to lose BART.”

“Transit is essential for the Bay Area’s future, and we must protect it and do everything in our power to avert devastating service cuts. This loan will avert a traffic catastrophe and save millions of Bay Area transit riders from losing their ride to work, family, and school,” Wiener said in a press release. “We spent much of the past year negotiating this loan with regional stakeholders and the Governor, and I’m immensely proud that we got it over the finish line.”

According to another Thursday press release, the funds will be directed to the Metropolitan Transportation Commission, which will then provide the short-term operating loans to Caltrain, BART, Muni and AC Transit. The loan will be repaid in quarterly installments over 12 years, with interest-only payments during the first two years.

Caltrain is expected to receive $50 million from the loan which will provide “critical near-term operating stability” while the agency purses “a longer-term, sustainable operations funding solution,” Caltrain spokesperson Randol White said in a statement.

The loan will be paid back over a period of 12 years in quarterly installments, interest free for the first two years. Interest rates will then be tied to the state’s surplus fund so that general fund will not be short-changed.

“We all need to step up our game,” Newsom said. “We can’t continue to do what we’ve done because we will be right back here in a few years.”