Gov. Gavin Newsom this week signed a bill that will allow public transportation agencies in the Bay Area to receive millions of dollars through an emergency loan aimed at keeping their operations afloat.
“This agreement will help protect transit service for more than 3 million monthly riders,” Newsom said in a statement Thursday at the Colma BART Station. “I’m proud of the progress the Bay Area transit service and operators are making on ridership recovery, and this loan will continue to build on that success as the region works together on long-term funding solutions.”
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 loan will help prevent potential service cuts as many public transit agencies in the Bay Area face dire financial constraints primarily due to struggling ridership.
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.”
Still recovering from the pandemic
Many public transit agencies in the Bay Area have fallen into deep financial woes in the post-COVID-19-pandemic era, and ridership has not fully bounced back as less people work in the office.
BART is facing immediate and long-term budget shortfalls of hundreds of millions of dollars and is developing a contingency plan in response that includes eliminating service and closing several stations. The San Francisco Municipal Transportation Agency, or SFMTA, is looking at a fiscal cliff that could grow to more than $400 million by 2030.
“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.”
“If we don’t do anything, if we just let inertia set in, we’re going to lose our public transportation systems. …”
State Sen. Scott Wiener
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.
Another stipulation is that the California Transportation Commission will oversee the spending of the funds.
“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.”
The post Newsom approves $590M emergency loan to stabilize Bay Area public transit districts appeared first on Local News Matters.