SamTrans adopts budget with improved projections

During previous meetings, board members expressed the need to weigh a host of options to narrow the deficit, even evaluating more extreme measures, including furloughs, layoffs and the elimination of some Clipper discounts. And with federal funding in a more precarious position, some had also hoped to shore up paratransit funding, which relies heavily on the U.S. Department of Transportation.

But the agency has been able to hold off on those options, as the most figures reflect more cuts made to discretionary spending, such as travel and training costs, as well as holding off on hiring vacant positions.

“We’re able to reduce costs by $2.2 million in 2026 and $2.7 million in fiscal year 2027,” Ladi Millard-Olmeda, director of Budget and Financial Analysis, said. “These reductions were achieved by deferring hiring for specific administrative positions and targeting discretionary expenditures.”

She added that staff feel confident federal paratransit funding will remain stable.

Given the economic climate, cities and agencies such as SamTrans are also grappling with lower sales tax revenue, which is “highly dependent on economic conditions,” Millard-Olmeda said.

The revenue stream accounts for nearly 75% of the transit agency’s funding. Staff predict passenger fares will only account for 4% of revenue next fiscal year and the following.

While the agency staved off service cuts as part of the recent budget process, it still plans to conduct a robust fare analysis in the upcoming fiscal year, meant to evaluate potential inefficiencies and overall ridership data.

The deficit in fiscal year 2027 is expected to come from not just general cost escalations, including wage increases but also a new SamTrans office, Millard-Olmeda said.

“Fiscal year 2027’s proposed uses total $343 million, up $14 million from fiscal year 2026, reflecting cost escalations, universal wage increases and the debt service or bond issuance associated with Millbrae-Gateway headquarters acquisition,” she said.

While fiscal challenges are not unique to SamTrans, the agency still has a more favorable position than other major transit operators, such as Caltrain and BART. The Metropolitan Transportation Commission, the region’s transit financing agency, is looking at a Bay Area transit ballot measure, however, if it passes, much of the funding would be prioritized for rail operators and agencies facing steeper shortfalls.

In a press release, SamTrans board President Jeff Gee said the two-year budget was an ideal balance of short- and long-term needs

“This budget supports the workers, families and students who rely on SamTrans every day, and it positions us to meet the financial challenges ahead without compromising our commitment to safe, dependable service,” he said.