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California: Governor Newsom signs legislation authorizing $590 million emergency loan to Bay Area Transit

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Feb 19, 2026

Governor Newsom signs legislation authorizing $590 million emergency loan to Bay Area Transit

Financing protects service for hundreds of thousands while region works toward November 2026 ballot measure

What you need to know: California is stepping in to provide stability for the Bay Area Transit service, while ridership rebounds and agencies advance long-term budget solutions amid unprecedented pandemic-related disruptions. The $590 million loan will help BART, Muni, Caltrain, and AC Transit maintain reliable service as the region works toward long-term funding stability.

COLMA – Governor Gavin Newsom, alongside state and community leaders, today signed AB/SB 117, authorizing the California State Transportation Agency (CalSTA) to loan $590 million to the Metropolitan Transportation Commission (MTC) from the Transit and Intercity Rail Capital Program (TIRCP). The Bay Area Transit Loans measure will support and stabilize Bay Area transit services as the region continues emerging from the impacts of the pandemic and ridership continues to rebound.

California is stepping up to support Bay Area transit—this agreement will help protect transit service for more than three million monthly riders. The benefits of a strong transit system are clear: growing ridership, cleaner air, and less congested roads. 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.

Governor Gavin Newsom

"Our public transit connects people to jobs, schools, healthcare and opportunity," said California Transportation Secretary Toks Omishakin. "This $590 million emergency loan helps ensure Bay Area communities continue to have reliable service as ridership returns and the region works towards a long-term funding solution. "We're committed to keeping transit strong for the riders that depend on it every day."

"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," said State Senator Scott Wiener. "This loan will avert a traffic catastrophe and save millions of Bay Area transit riders from losing their ride to work, family, and school. 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. This is the latest in a yearslong effort to shore up funding for our transit systems and make them even cleaner, safer, and more reliable than ever. While there is more work to do, today's announcement is a major win for securing a bright future for Bay Area public transit and the millions who rely on it every day."

"This is a major victory for our region's transit operators, workers, and the communities that depend on public transit to get to work and school," said State Senator Jesse Arreguín. "I want to thank the Governor, my colleagues in the Legislature, and the many advocates who supported this effort to ensure the Bay Area can continue to be an economic engine to the state, while also advancing our efforts to fight climate change."

"As Chair of the Bay Area Caucus, I know how important this funding is, and I'm grateful for all my colleagues who helped with this agreement," said State Senator Josh Becker. "I've long pushed to improve our transit in the Bay Area and move toward a seamless system and have seen much progress recently. Caltrain ridership is up 50 percent since electrification, BART has seen record high scores for safety, cleanliness, timeliness, and overall satisfaction, and more across our system. Public transit is a public good that so many rely on, and this funding will help us continue to make improvements and bridge us to a bright transit future in the Bay Area."

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"As Chair of the Assembly Transportation Committee, I commend Governor Gavin Newsom for signing AB 117 into law today," said Assemblywoman Lori D. Wilson. "This responsible and temporary measure demonstrates California's ongoing commitment to providing safe, reliable public transportation. BART, as well as MUNI, Caltrain, and AC Transit, are vital assets for the entire Bay Area, playing a key role in advancing our state's climate goals and reducing congestion on our roads and highways."

"San Francisco's recovery is essential to the success of our region and our state—and our city cannot continue its comeback without a safe, reliable transit system," said San Francisco Mayor Daniel Lurie. "With the signing of this bridge loan, we are securing necessary resources to sustain our recovery and ensure transit systems can continue serving the families, seniors, students, and workers who rely on them every day. We're already delivering greater accountability and efficiency for Muni, and ridership is continuing to climb toward pre-pandemic levels. Thank you to Governor Newsom for your commitment to our city and region's recovery, and to our partners at MTC and in the state legislature who worked to deliver this critical support."

"This bill is a big win for the Bay Area. It keeps the transit system running smoothly next year—supporting more than 900,000 daily trips—so people can keep getting to work, school, family, friends, and events without disruption," said Metropolitan Transportation Commission Chair Sue Noack. "And for those who don't take transit, it means we avoid a surge of cars on the road and all the congestion that would come with it."

Ridership recovery and regional progress

Like transit systems across the country, BART, Muni, Caltrain, and AC Transit were hit hard by the pandemic—but all four operators have made strong progress in rebuilding ridership in recent years.

This emergency loan is structured as a bridge to support agencies while the region pursues a long-term funding solution through a potential November 2026 regional sales tax measure authorized through the enactment of  Senate Bill  63 (Wiener, 2025). If approved by voters, that measure would provide new operating funding beginning in July 2027. This financing will help cover operating deficits and advance a strong, reliable, and financially resilient transit system.

Loan structure and accountability

MTC would use the loan proceeds to provide short-term operating loans to four Bay Area transit operators and repay the loan in quarterly installments to CalSTA over a period of 12 years, with interest-only payments during the first two years.

Key provisions include:
  • Authorizes MTC to use the proceeds of the loan to offer loans to transit entities within the Bay Area region for public transit operating purposes.
  • Requires MTC to repay the loan in quarterly installments to CalSTA over a period of 12 years, with interest-only payments during the first two years.
  • Requires MTC to secure repayment of any loan issued by CalSTA by pledging the State Transit Assistance Program revenues received by transit entities.
  • Directs CalSTA to work with MTC to ensure there are no impacts on existing capital projects.
  • Requires the California Transportation Commission to monitor and report to CalSTA on the unallocated and unexpended balances of the region's project awards for the TIRCP.
  • Authorizes MTC, in coordination with CalSTA, to prioritize the use of existing sources of funds allocated by the state to the region so that projects are not materially impacted with regard to scope, schedule, and eligibility for non-state funding.
  • The loan carries an interest rate that reflects the interest rate of the state's Surplus Money Investment Fund (SMIF) to ensure the general fund will not lose out on interest income.

The governor has also announced that he has signed AB 107 by Assemblymember Jesse Gabriel (D – Encino) – Budget Acts of 2023, 2024, and 2025.

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For full text of the bills, visit: http://leginfo.legislature.ca.gov.

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