Caltrain fares have not returned to pre-pandemic levels of around $83 million in 2019, with the proposed 2024 budget estimating around $30 million in revenue.
Caltrain’s operating and capital budgets remain balanced for the next two fiscal years, although subsequent future years remain financially uncertain, the transit agency’s staff announced at a June 1 meeting.
Much of the difficulty is due to the dip in financial and ridership numbers Caltrain faces following the pandemic, as many riders have yet to return to the level and frequency seen before 2020. To deal with the loss of revenue, Caltrain is using its Measure RR sales tax funds on operating expenses, which means less money for future capital projects related to rider experience, according to staff. Measure RR is a 2020 voter-passed sales tax that gives Caltrain a dedicated funding source for expenses beyond farebox revenue. Caltrain is delaying needed capital projects to ensure its budget is balanced in 2025, with around $48 million in deferred project costs in 2025, staff said at the meeting.
Caltrain’s operating budget for the 2024 fiscal year is $192 million and $238 million in 2025, while the capital budget for 2024 and 2025 is $510 million and $74 million, respectively. The 2025 operating budget calls for using $36.2 million in Measure RR funds to balance the budget. The proposed 2025 operating budget calls for $238.1 million in total expenses while $208.7 million will be in revenue, with $6.8 million going to reserves.
Caltrain fares have not returned to pre-pandemic levels of around $83 million in 2019, with the proposed 2024 budget estimating around $30 million in revenue and $36 million in 2025. Caltrain fares represent a significant portion of revenue for the transit agency, more than other agencies, increasing the importance of strong ridership numbers. Go pass revenue is at better levels in the next two years compared to the $23 million pre-pandemic number, estimated at $16 million in 2024 and $18 million in 2025. Total farebox revenue in 2025 is only around 51% of pre-pandemic levels. According to Caltrain, it is facing a projected deficit of $33 million in 2026 and $58 million in 2027.
Caltrain also faces a significant financial commitment in aiming to complete train electrification by 2024 as it looks to improve service for riders and meet environmental goals. The project will electrify Caltrain stations from San Francisco down to San Jose, increasing service to six trains in each direction during peak times and increasing operating speed. In San Mateo, Caltrain crews are working to perform signal work during the day and installing equipment on poles at night. At the June meeting, Caltrain Director Steve Heminger said the budget showed the transit agency would be fine for the next two years, arguing Caltrain had a different financial position than BART. However, he stressed the transit agency needed to think about future financial challenges like electrification and ridership.
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“We still have a challenge, and part of that challenge is not the pandemic,” Heminger said. “It’s the fact we are operating an electric railroad, and that is going to cost more than to operate a diesel railroad.”
The board unanimously accepted the budget resolution at the June 1 meeting.
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