Senate Standing Committee on Budget and Fiscal Review

And today our hearing is on the State of Public Transportation in California. Colleagues, public transportation is not optional. It's essential for so many people, whether they're going to work, to the doctor, to the grocery shopping, picking up their kids from school, or any number of other essential activities in people's daily lives.

Public transportation helps us meet our housing and climate goals by promoting and facilitating dense urban infill housing and giving people the ability, if they choose to drive less.

Transit especially provides this access to lower income people, working class communities, communities of color who are more likely to be transit dependent and thus at especially high risk of literally being stranded if transit is not working. Public transportation is sometimes there's a perception that it only benefits people who ride transit or only benefits people in urban areas.

That is not true. Public transportation benefits everyone, including drivers. Without public transportation, there would be many more cars on the road and much more congestion.

In addition, even though in some of our larger cities there is higher transit ridership, we know that in all parts of the state, or almost all parts of the state, there are people who rely on transit. If the bus isn't running, then they are completely stranded. It is in everyone's interest to have robust transit.

Despite the fact that public transportation ensures mobility access for so many Californians, despite the fact that it helps people avoid traffic congestion, and despite the fact that it clearly helps us meet our climate and housing goals.

The Federal Government and the State of California have historically provided far less dedicated public transportation operating funding support than they should be providing. Operating funds for California's larger high ridership transit operators is much lower than in other comparable states, including New York and Pennsylvania. I will say that again.

California, compared to other large states with large transit operators, invests less in the operations of these critical systems. That needs to change in a big way in order to set public transportation up for long term success for the people of California.

While federal aid has helped tide transit agencies over through the early years of the pandemic, ridership has returned unevenly and operators would have been forced to profoundly cut service had we, the Legislature and the Governor not stepped in in 2023 with a hard fought appropriation of $1 billion statewide to support these systems.

That funding, which included accountability provisions and set up a Transit Transformation Task Force administered by the State transportation agency through SB-125 helped delay the transit fiscal cliff by a few years. And here we are. At this time, we can't count on federal aid.

In fact, our new President and Project 2025, which appears to be the blueprint for his presidency, is hostile to transit funding and has advocated to zero out transit funding from the federal gas tax.

We also know that the U.S. Department of Transportation put out what I believe is an illegal order last Friday purporting to tie federal transportation funding not just for transit, but for roads and highways to birth rates and marriage rates and other factors clearly designed to remove funding from blue states.

So we have to engage in self help here in California as we fight for better support from the Federal Government. And today we'll be hearing about the state of transit and what some of our options are.

We'll hear from the LAO, the California State Transportation Agency, from transit operators and the California Transit Association about near term and long term opportunities around both operating and capital. We'll also discuss how the SB-125 Transit Transformation Task Force has been going, and I look forward to the discussion today.

Before we begin, I'd like to give an opportunity for Vice Chair Niello to speak and also for Senator Richardson, who chairs budget sub five, which includes transportation funding.

Thank you, Mr. Chair. I look forward to the details that we'll hear this morning with regard to the challenges of transit in California. That it is important to try to find options for people that have really no other options, particularly in the face of people that do have other options that tend more likely to take the other options.

So I agree it's an important issue and I know that it is a priority of yours, Mr. Chair.

But I hope as we move on in our deliberations about the upcoming budget year that we have some focus like this on some other issues that I think are perhaps even more important to a broader spectrum of the population of California, like wildfire mitigation, homelessness, the distressed hospitals that we have in the state, particularly how we're going to fund the public portion of the SB-525 minimum wage mandate.

So I look forward to further informational hearings on other issues that are very important to the state and to our budget.

Thank you, Mr. Vice Chair. Senator Richardson, Madam Subcommitee Chair.

Thank you, Mr. Chairman. I just wanted to speak very briefly and thank you, Mr. Chairman and all the staff for preparing this very important issue. Yes, the gentleman, I believe from the southern portion of our state. We have many issues before us however, transit ties to so many things.

In addition to the points that the Chairman made, having public transit also helps us from a climate perspective as well. He alluded to the fact of additional cars that would be there if we didn't have public transit. In my district, transit is used very much. LA Metro, I believe, is one of the largest in the United States.

And so I really look forward to the information in this hearing. Finally, I would remind everyone that in California we're going to be having the Olympics and also the World Cup and many things that are going to come. And so hence also we need a very transit system for the incredible state that we are.

So thank you for everyone who will present and we look forward to preserving and enhancing our transit system. Thank you.

Great. Thank you very much. And colleagues, if there are additional open comments, happy to entertain them. We'll also have opportunities for comments, questions for each of the panels. So whichever you prefer. Senator Seyarto.

Thank you very much, Mr. Chair. So, you know, I don't think anybody denies that public transportation is a very, very important part of an overall transportation system for California. And it is especially relevant to the more dense communities, urban environments like San Francisco and LA and San Diego.

However, we have to remember not all of the State of California is geographically and demographically like that. We have a lot of areas that are experiencing a lot of growth through our housing demands and those areas will not be transient dependent.

And part of that is because people don't want to trade in the convenience, frankly, and the safety of their vehicles, whether they're electric or gas, for a transit system. And in some areas, the transit system will not exist for 30 or 40 years.

So it is still important for us to not only provide these types of transportation opportunities for people that depend on them, but it is also important that we're not trying to force people out of cars where they don't have other options just so we can make it inconvenience for them.

And in some of our programs in California, I think that's a little bit what we're doing, when you look at some of the CARB requirements, they're impossible for us.

And there's been an overall, you know, the beginning of our session, both the speaker of the Assembly and the pro tem and the Administration said, hey, we hear voters loud and clear. We have to do something about the rise in costs in California and making California more affordable.

I don't see how forcing people out of their vehicles is going to help them when there is no other option and making it way more expensive for them to continue to use their vehicle is going to be an option because it's certainly not going to be that way for areas where I am.

I represent in Riverside, San Bernardino counties or the rural areas of San Diego. So there is a lot of work to be done. But much of it is not criticism for a public transportation system that people feel safe in and people find convenient and people find it clean.

If that's out there and offered, I'm sure there are a lot of people that will do it. But three years ago, when we were talking about the $5.1 billion that we wanted to use to help our transit agencies stay afloat, that was one of my questions was why are people not riding it?

And why today are they still preferring to drive? I think there's a person that's going to testify that did a lot of studies in that area. So it's kind of hard for us to force that. It's in the regions that don't have the density of the urban areas.

And I think it's important for all of us to remember that when we're trying to figure out where dollars go, because we're going to spend it all on transit and not on roads and other means for people to get around in areas that are not going to have these type of transit opportunities.

They'll have buses, but they won't have rail and things like that for a long time to come. So anyway, I'm looking for us to find that balance.

And I don't want us to ignore the realities of what people demand out there, which is that they have something to drive their cars on from the areas that are getting forced to grow where we don't have jobs. So those are my concerns, and hopefully after the hearing, we'll be able to explore some of the answers to those concerns. Thanks.

Thank you, Senator Seyarto. I will note, fortunately, we are getting significant highway money from the Federal Infrastructure Law. Hopefully that law will still be around, but we're seeing big investment in our highways, which do need a lot of rehabilitation. Senator Allen and then Senator Wahab.

Yeah, obviously this has turned into a lot of commentary, which is fantastic given all the issues that we have. I mean, I look forward to this discussion. I really appreciate you highlighting this massively important issue.

All the issues that our good friend Senator Niello mentioned are all very important too, and we need to deep dive into everything, quite frankly, given the enormity of the challenges we face as a state right now.

But I will say, as someone who grew up, you know, the son of an immigrant from Europe and who spent some time on the East Coast. I always felt as though sad in some respect for my own City of Los Angeles, this wonderful, great city.

When I'd come home and I'd experience these other cities that had such great public transportation systems where the vision that has been described was in place and I got to experience it myself. Why didn't we have it in our own town? I'm glad we're doing this big build out. But, Senator Seyarto is absolutely right.

It has to be clean. It has to be efficient, affordable, safe. And it's not about forcing people out of their cars. It's actually about providing an alternative that is so attractive that people want to ride transit instead. And that may sound difficult in some parts of the state. Of course.

Of course it's not going to work for everybody. But in parts of the state where we have high density, it can be a blessing to sit on a train instead of in traffic.

I say this from personal experience, living on the west side of LA, where at certain times of the day it can take an hour and a half just to drive downtown. And I've purposely chosen to take the train even though I had access to a car, because it was a much more pleasant experience.

I want to provide that opportunity for more people. I want to provide more options and alternatives to sitting in traffic all the time, which is unfortunately a massive part of the life of Los Angeles. I am aware of the fact that there's far more money going into roads and highways than for transit.

But we need to spend some time looking at how to improve our transit system and make it really accessible to everyone. One of the great things about going to a place like New York or London is you see students sitting next to bankers sitting next to tourists, all together on the trains, riding together.

But it's not so class based. It's not such a reflection of one's socioeconomic status. And, you know, I'd love to see that kind of thing happen. You know, I'd love to see that sort of diversity on our transit system here in California. So I look forward to this discussion.

I appreciate the chair bringing this item forward, and it's a very important issue for all of us.

Thank you very much, Senator Allen. I will say, just for the record, when I was a new baby Senator coming in and we had SB-1 and the initial version of that had extremely little funding for transit, Senator Allen helped lead the way to make sure that that changed.

So thank you for your longtime leadership. Senator Wahab, followed by Senator Cabaldon.

Thank you. I know we haven't presented, but I just want to make a little bit of a comment. Personally, I think that infrastructure, including public transit, should not necessarily be a political issue. I think that we should be investing in our infrastructure.

That infrastructure is not only our public transit in the sense of, like, you know, things like BART and so forth, but also our roads. Right. You know, I think that anywhere we drive, we see a lot of people complain about, you know, the potholes, the crumbling infrastructure, our bridges, you know, many, many other items.

So I highlight this because public transit, as Senator Allen stated, is very much supposed to be more attractive than driving. And I will say, as a Bay Area member, I think one of my frustrations is the lack of true vision, slash moving forward in what public transit is supposed to look like. To Senator Seyarto's point, absolutely.

The cost of living, for example, in the East Bay and the South Bay has grown so significantly that many, many, many people have been moving further, further and further into the deeper East Bay and even the Central Valley and further, yet they still commute with their vehicles because there is no real public transit that goes that deep into California from the Bay.

And the jobs are still in the Bay Area, but for home ownership and housing opportunities that are more affordable to the individual, they have to move elsewhere. That is not fair.

I will also say, considering the fact that, you know, we keep talking about public transit, but public transit ridership is down, and the focus, a lot of these agencies is where ridership is up. Not how can we go further, how can we make this faster, how can we make it cheaper, how can we make it safer?

And that has been my big frustration with transit as a whole. And I think that that's. Thank you. Yes. Would you like to say that on record? So I truly believe that there's a lot of work to do.

I also think that there's a significant amount of lack of coordination and infrastructure, and that is why I have been pushing consolidation as much as possible in the Bay Area. We have 27 transit agencies.

And when you take a look at the 27 public transit agencies and you're not even including the other options for transit, which is the Ubers, the Lyfts, the Waymos, the whatever else that the public has available to them, again, the concern is how is public transit a viable option for the average person?

So if you can drive faster than public transit, that's a problem, right? If it's cheaper, if it's safer. And I highlight this because you know the, the infrastructure that we tried to build in California when we're talking about high speed rail and the bullet train, all of these things I have heard about since I was in elementary school and we still don't have it. Right.

And so we're spending a lot of time, decades in fact, hours, money, millions and billions of dollars and we still don't have anything super viable in the State of California.

And yet we are the fifth largest economy and supposed to be a global player and yet many other countries have completely surpassed us when it comes to public transit. So I highlight all of this because when we're talking about public transit, for me I would like better consolidation.

Forward thinking of what it's going to look like in 10 years, 20 years, 30 years down the road, I would like it to be a little bit more, I'm going to say fast, right? People want to get to their locations faster and obviously from further locations just because of their living situation. So those are my comments.

I do just want to highlight that. I think when we're talking about public transit that should be at the forefront is what is the value add to the end user, which is our public. And at the same time we can't keep increasing taxes for a system that has not worked and ridership is on the decline. So thank you.

Thank you. Senator Wahab, next Senator Cabaldon, followed by Senator McNerney.

Yeah, thank you, Mr. Chair. Senator Niello and I worked together in the Sacramento region on Pre SB-375 Transportation and Land Use Exercise. And Senator Niello, I'll just caricature for a moment. Senator Niello envisioned a regional investment plan that put all of our money into roads, highways and bridges.

I envisioned a plan to put all of our money into transit, walking and biking. And we modeled both of those. And Senator Niello's plan predictably produced lots and lots of pollution and my plan produced lots and lots of congestion in the models. But here's the thing.

My plan also produced a lot of pollution and his plan also produced a lot of congestion. Simply the investment alone in transit was not enough of the plan picture. There are precious few examples in California of places that weren't laid out with transit in mind in some form.

The LA electric streetcars, my own region, which was served by electric streetcars as well. There are precious few examples where we have created effective, viable transit systems in California that serve places that didn't have them in any form a century ago.

And we are now building land use plans in places all around the state, including my district, that depend on transit. But we don't know what that means in places like my district. I represent the North Bay.

So much of what the Senator from Hayward said about the deep, profound areas of the East Bay and the North Bay, we don't have any. There isn't a single acre of my district, not one out of 3,000 square miles.

There isn't a single acre that has what counts as a major transit stop for CEQA relief or for any of the land use provisions. And when we talk about it in the Bay Area and elsewhere, it's sort of like the North Bay. It's, you know, we're just transit backwards and someday we'll get there.

But there's no evidence that we will because our land use patterns and our transportation patterns aren't pointing in the direction of a highly effective transit system that's based on density. So I'm making the comments because I don't want to bother each of the speakers, but I think with the specific question over and over again.

But one of the challenges is what does transit mean in places in the rest of California in which we have the same expectations as we absolutely should to build additional housing, to build somewhat more dense, but it's three stories, five stories, maybe eight in the densest place.

It's never going to support Muni, it's never going to support BART or systems of that magnitude. So what does transit mean? Those of us that are experimenting with on demand, publicly operated, on demand systems, great, they're turning out to be quite effective in Yolo County and Napa County and elsewhere.

But for most of the folks in this room, they don't count as transit because they are not the traditional heavy urban systems.

And so part of what we've got to examine, and I hope that the speakers today will examine the Transformation Task Force as well, is what really not hopeful someday that backwards places like Vallejo or West Sacramento will ultimately become downtown LA or San Francisco.

But what really does an effective transit system married with our land use and housing expectations really look like? And then how do we provide the financial mechanism, not just the dollars, but the formulas, the definitions and whatever that will allow the rest of California to be able to share in that transit vision? Thanks, Mr. Chairman.

Thank you very much, Senator. Next, I'll recognize Senator McNerney, who will be followed by Senator Perez and Senator Laird.

Well, thank you, Mr. Chairman. I want to raise issues, awareness about a much needed transit project. It's very important in my district and would be very impactful in Northern California. It's called Valley Link. Valley Link is a shovel ready project, rail project to connect northern San Joaquin Valley to the Dublin Pleasanton and BART station.

So in other words, that 580 corridor, which over the Altamont Pass, which is one of the most congested commutes in the nation, would give people an opportunity to take rail instead of driving in their cars for that long, harrowing drive.

Valley Rink would not only bring a much needed relief to the commute, but would also reduce greenhouse gas emissions by up to 42,000 metric tons per year by 2040. Plus, Valley Link would provide a lifeline to BART, which I do use. Valley Link would connect directly to the Dublin Pleasanton BART station.

It would increase BART's daily ridership by about 20% per day, adding up to about 30,000 daily BART riders. And as I already mentioned, it's shovel ready. All of its environmental reviews are now complete. It just needs funding.

The Valley Link would also effectively serve as a Livermore BART extension, which was never completed, even though the residents of Livermore and Alameda County have paid for it multiple times. And it will be cheaper than actually extending BART from Pleasanton to Livermore.

Valley Link is a kind of common sense, pragmatic regional transit project that would help Californians in the short term, not the 15 to 20 years from now. Thank you. I yield back.

Thank you, Senator McNerney. Senator Perez.

I've appreciated today's conversation and, you know, some of what my colleagues have already brought up and raised. You know, I want us to focus on exactly what Senator Cabaldon, you know, was talking about and mentioning.

And that is this idea that, you know, we do need to start planning, not just as a state, but for our local cities, because we're the ones that are going to be providing them with these dollars to think about the future. Right?

And for us to really start introducing in, you know, things like active transportation, making sure that our public transit systems are working, that they're effective, that people want to ride them. We have built our cities and continue to build our cities to accommodate cars. Our communities are more car centric than ever.

And, you know, folks get frustrated that there is, you know, very few open green spaces that, you know, sidewalks are so skinny and, you know, dangerous to walk on, and we have vehicles that are driving faster than ever. It's become so incredibly dangerous to move around our communities if you're not utilizing a car.

And so us making investments into quality public transportation, you know, into active transportation, I think is needed now more than ever, especially when you have more people dying on our roads than we've ever seen before.

You know, I agree that we need to continue to invest in our freeway infrastructure to make sure that it's kept up to date. But for us to even look at or have discussions around anything else I think is outdated. We really need to be looking at these different forms of planning and designing our cities.

And so much of this is connected. Right. This, we're not talking about this issue on its own. It is so connected to other pieces like housing. Right. And this is really more about urban planning and urban design, in my opinion, more than anything, rather than just transit.

So, you know, I really want to highlight that I'd be interested in hearing from this discussion what's yielded results, what's actually improved upon, what's improved ridership and caused more folks to want to utilize our public transit systems, how we, we make meaningful investments to move that direction, I think would be so critical and important.

In addition to that, you know, I also want to bring this up, and I'm going to be bringing this up every single meeting that we have. But, you know, we had these major fires happen in my district and Senator Allen's district.

And, you know, I've heard concerns already from so many stakeholders about the impact that that's going to have on funding and have already had, you know, local cities reach out and express concerns about the impacts that this might have on SB-1 funding.

So if folks wouldn't mind just making sure that we're including that and whatever conversations we have moving forward, how we're just mitigating any sort of impact to tax dollars that would have come our city's way to make sure that our communities aren't being negatively impacted because of this natural disaster that none of us anticipated happening.

So just want to raise that as well, because that's, you know, going to be something that I'll be looking for in every single one of these conversations. Thank you.

Thank you, Senator. Senator Laird, followed by Senator Blakespear.

Thank you, Mr. Chair. I wanted to make a comment because I think I have an experience that's slightly different from some of the previous comments, and I represent a very not urban area. And we're going to hear if we actually stop making comments. And I'm part of the problem.

We're going to actually hear from my transit district where I sat on the board for nine years. And an interesting thing happened about 10 or 12 years ago. The bus drivers went on strike and there was a traffic meltdown down everywhere in the county on the freeway.

The University had to do parallel parking for a mile and a half up to the thing. You couldn't get anywhere. It was a real indication of how many people rode transit and the difference it made in our community. And it goes to rural areas, it goes all over in the county.

In fact, one of my favorite things when I was on the transit board is the last bus to Boulder Creek about 11 o'clock was known as the Space Shuttle because of who was on it. And yet there was a bus to that really rural area that late in night as part of regular service.

And yes, they're trying to boost ridership. They have challenges. They may go to the voters again, but it makes a fundamental difference.

And in Monterey County, we just had a big fight fight to approve a project funded by the Federal Government, the state government and the locals where it will utilize the rail line, the 144-year-old rail line with buses. It will get traffic off the freeway, which is the most congested place in the county.

And it is accessible so that somebody in the Salinas Valley in Soledad could get on a bus for two bucks and, and ride it all the way to their service job in downtown Monterey. And it reaches into those rural areas. Yes, there needs to be more service, there needs to be more times.

But there are stories about how this does reach into the rural areas, how it does work in certain ways.

And I think that our challenge is making sure it has adequate support to do that so that you can, as much as some of us were not thrilled about all the eight story housing buildings going up in downtown Santa Cruz changing the character of our community.

They are built around what is about to be the rebuilt transit center so that for a lot of the parking not provided, they're just going to walk down the street and, and get on a bus and go to the University or go to any place around.

It integrates what is being required by the RHNA numbers with refurbished transit. And so I think the thing about it is how can we support that? How can we make sure they increase the rides, which is in their plan? It's only being delayed by new buses that aren't showing up the next tranche.

So there is a difference that works in some non-urban areas and I look forward to the hearing to see how we can be as supportive as possible in doing it.

Thank you. And then finally, Senator Blakespear.

Yes, thank you. I appreciate your patience as we all make our comments here at the beginning. I represent northern San Diego County and southern Orange County. And I have a Subcommitee Committee through the Transportation Committee on the low sand rail corridor, which is the train that runs from San Diego to San Luis Obispo. It's 350 miles.

And it's an existing rail corridor that is subject to threats from climate change, sea level rise, bluff collapse, but has had a tremendous amount of investment over many, many decades and basically needs to work better, needs to be a really important part of our future.

And I think that one of the things that I always come to this conversation about transit is a recognition that it would dramatically improve people's quality of life to have transportation options. And also that transportation continues to be the single largest source of greenhouse gas emissions.

And when 40% is coming from the transportation sector, 40% of emissions, we need to really be focused on how it is that we reduce that because it's a critical part of our climate change. So the scoping plan that the state has addresses VMT, it also addresses decarbonizing the transportation sector.

And it's not just to have new vehicles that are sold be zero emission, because we will still have a large number of vehicles that are combustion engines, but to make sure that we are mode shifting and so mode shifting into new transit, but also particularly mode shifting and investing in the existing transit we have, which is the rail line that I'm particularly interested in, but is also the other transit that we have throughout the state.

I think it's important to remember that the Governor released a State Rail Plan and it included the quote that the state envisions passenger rail and transit, which combined currently serve only 2% of miles traveled in California, to increase to 20% of all miles traveled by 2050 on a zero-emission fleet.

So this would shift nearly 200 million daily passenger miles from highways to statewide rail and transit network. So conceiving of going from 2% to 20% is a really serious commitment. I mean, it takes a plan, it takes an approach, it takes the commitment from the leaders.

And I look forward to and encourage the ambition of this Transit Transformation Task Force. So that was something that was created from SB-125 and it's a 25 member advisory body that's developing recommendations to grow transit ridership and improve the transit experience. And the final report is due to us, the Legislature, in October of 2025.

So recognizing that we are the politicians who talk and express our values, but there are the people who do the deep technical work of laying out the plan of how do we get from 2% to 20%. And that work is difficult. And in every area where we're trying to make serious progress.

It requires that commitment, staying on track, being ambitious, being visionary, so that we can adopt the plans that come forward. So I very much look forward to the hearing today. I'm so glad that we're having it. And I thank the chair for organizing this out of the Budget Committee because it is a top issue in the state.

But I also really want to encourage everyone listening today and in the room today to continue your commitment and to not have what's produced back to the Legislature, be not actionable or too modest or unable to meet goals, because we want to see the path to get there.

So please make sure and give that to us. Thank you very much Chair.

Thank you, Senator Blakespear. You know, it's good that there are a lot of opinions about public transportation on this Committee that actually it's an important issue. And, and I think it's a good thing that everyone has folks have opinions about it. So thank you.

It was a really good cross section, I think, of perspectives in the Legislature. So thank you. Okay. With that, we will turn to our first panel. We have three panels today. The first one will be just an overview of transit funding and operations in California. The second will be about recent state investments in transit.

And the final will be perspectives from operators. We'll have three operators from San Francisco, LA, and Santa Cruz. So we'll start with the first panel, overview of transit funding and operations. We'll be hearing from Frank Jimenez with the LAO and Brian Taylor, who's a research fellow with the UCLA Institute of Transportation Studies.

You can come forward, and we appreciate you both being here.

I don't know who wants to go first. Mr. Hermenez, your first.

I'll go first. Thank you. Mr. Chair and Committee Members, Frank Jimenez with the Legislative Analyst Office. We have been asked today to present an overview of transit in California, how it's funded, and recent state actions that the state took to provide relief to transit agencies.

I'll be making my remarks through a handout that you all should have received, and if not, it should be making its way around the room.

For those that are watching the hearing online, this handout is available on our office's website at laoca.gov. So turning to the first page of the handout, there are over 200 transit agencies that operate across the state, delivering services to the public through buses, trains, ferries and paratransit vans.

Transit systems are generally owned and operated by local governments, such as cities, counties, and local transit authorities. Funding for transit comes from fare revenues, but also local, state and federal sources. And on page one of the handout you can see a figure that shows funding data from 2019, which is the last normal year of historic trends prior to the pandemic.

And as you can see, local sources made up the significant portion of funding for transit at 46%, with fares and fees accounting for 17%, and then the state and Federal Government providing 20 and 17%, respectively. The figure also displays data for 2023 and a couple things to point out of significance.

You see a significant decline in fares both in magnitude and percentage, dropping to 1.3 billion and 9%. You also see a significant increase in federal funding, both in magnitude and percent, and a slight increase on the state side as well.

And that is largely associated with augmentations from the Federal Government and the state to provide relief, which I'll discuss more in the later parts of the handout. Turning to page two of the handout, there's a figure that shows the major transit programs that the state has that provides funding to transit agencies.

They are both formula and competitive programs. The formula programs can be quite broad and support a variety of activities, are very specific on how funds should be utilized. The state also has one major competitive program directly related to transit, and that's the Transit and Intercity Rail Capital Program.

In total, these programs are estimated to provide around $2.1 billion in the current year to support transit. Outside of these programs, transit agencies are also eligible to receive funding from other state transportation programs.

There's the State Transportation Improvement Program, which is a formula program, and for example, the Solutions for Congested Corridors Program, which is a competitive program, can support Improvements across highways, local streets and roads, and transit systems.

And then outside of the typical transportation program space, transit agencies can also receive funding from the California Resources Board HVIP Program, which provides vouchers to procure zero emission or near zero emission buses. So turning to page three of the report or of the handout, there's a figure that shows ridership in California.

And as you can see, ridership had been on a decline since 2014 and fell significantly during the pandemic in 2020, falling by more than 50% compared to 2019 levels. In 2023, statewide, ridership was 29% lower compared to 2019.

We don't have data yet to complete the calendar year for 2024, but recent data from November 2024 indicates that ridership was 21% lower compared to November 2019. So that's indicating that there are some continued improvements in the previous calendar year.

Can I just interrupt you. I want to. I think this is the, this is a really, I think, important issue. And the terminology is important. We've been talking since the pandemic in terms of what we call ridership recovery and it varies. SF Muni is in the, I think the high 70s at this point.

BART is in the mid-40s. There are different agencies that are at different levels. When we use, when we've been using the word ridership, we've been were referring to number of trips taken. Right. Whereas when I think of the word ridership, and I've been guilty of this too, ridership is a rider, a human being who is riding.

And so if you have, let's say someone who used to commute five days a week is now commuting three days a week because they work from home the other two days. That is, technically, that is a 40% reduction in the number of trips, but that is the exact same number of human beings using it.

It's the same person who is still relying on it, but for fewer trips than before. But that person still needs it. And so I know this is something, I think that will come up today and I would love your take on it.

When we say BART is at 45% pre pandemic ridership, I think the number of people riding BART is, it's a much higher percentage than that. But people are taking not as many trips per week. And so I think that's just really important in getting our heads around this.

I would love to move away from the term ridership and talk about number of trips versus number of human beings who rely on transit.

Yeah, no, that's correct. Ridership is the term we use. That's the one people are most familiar with. But when you pull data on ridership, you're actually pulling data for passenger trips.

So that means that if an individual is taking one trip throughout their day and they're boarding various vehicles four times, even though that's one person taking a trip, that's four passenger trips.

Because it's also. And the reason I bring it up is that to the extent, which is very true, that there are people relying on transit, just because they're relying on it, say three days a week instead of five days a week, doesn't mean it's now less important because people don't want to ride transit anymore.

It just means that the patterns are changing. I just wanted to try to be mindful of that distinction, not criticizing. Because we've all been guilty of this.

Appreciate the comment. And then turning to page four of the handout, this provides a general historical overview of where we started in 2020 and where we landed in 23-24 when the state provided relief.

So as I mentioned before, agencies face significant disruptions and declines in fare revenues as a result of the pandemic. The Federal Government provided nearly $70 billion nationwide in operational relief to stabilize agencies budgets, prevent layoffs and maintain service levels. In total, transit agencies in California receive $9.8 billion in federal relief.

And this is on top of formula funding that the state and transit agencies receive from the Federal Government. That formula federal funding has historically focused on capital expenditures for transit. However, with this federal relief, the Federal Government deemed that the substantial and unprecedented operational relief was necessary to sustain transit operations during the pandemic.

Despite ridership and fair revenue not fully recovering, many transit agencies were able to utilize federal relief funds to sustain their operations for a few years. However, some individual transit agencies were projecting ongoing operating shortfalls as they began to exhaust federal relief dollars and as ridership remained below pre pandemic levels.

To provide agencies with additional time to develop pathways for financial solvency, the 23-24 state budget package provided relief through a combination of new and existing funding and by extending previously approved statutory relief measures. It also included accountability measures for relief funding and it created a task force to recommend long term reforms and improvements to transit statewide.

Turning to page five, we'll get into those details of the 23-24 relief package. So the relief package in 23-24 provided significant funding to transit for relief. In total, this was around $5.1 billion over a multi-year period provided on a formula basis that funding was provided through regional transportation planning agencies.

Yeah, I'm sorry to interrupt you again, but I just want to comment on that because when you say 5.1 billion, there is 4 billion in infrastructure capital money that we allocated in. I think it was 21 or 22, the big surplus year.

I can't remember which one it was 21 or 22, about $4 billion that was allocated previously when we had a big surplus. And we, I think wisely said let's put $4 billion in the transit capital needs.

In 2023, when we saw the fiscal cliff really coming, we added 1.1 billion in emergency operating funds which could, you know, they could be flexed to capital if systems wanted to. But I just wanted to distinguish that because sometimes people say, we gave $5.1 billion in 23 to these systems.

So it looks like just endless money. But the 4 billion was pre-existing capital money from a big surplus here, even though we allowed the systems to flex it to operating. That money, at least in the Bay Area, had been overwhelmingly committed to capital projects already. And so I just want to make that distinction.

Yeah, that is correct. As Senator Wiener mentioned, the funding was provided through two programs and the first one being the formula based Transit Intercity Rail Capital Program. So in previous budgets when the state had surpluses, it planned to allocate $4 billion over multiple years from the General Fund.

As we entered into the budget year in which that funding was first going to be allocated through the 23-24 budget package, the Legislature decided that that funding could be used by transit agencies on operational support.

So agencies had the choice between whether they wanted to use it for capital, which was the original intent, or operations, which was the now allowable use based on the 23-24 budget. The state also provided $1.1 billion through the Zero-Emission Transit Capital Program and that was funded through the Greenhouse Gas Reduction Fund and the Public Transportation Account.

And this funding was provided on a formula basis and can support transit agencies to either be used on the procurement of zero emission transit vehicles or operations. However, in response to recent budget deficits, subsequent budget packets adjusted the allocation schedule and funding sources for these programs, but it kept the total amounts the same.

So that included delaying some funding and shifting some of the General Fund portions to the Greenhouse Gas Reduction Fund. At the bottom there's a figure that shows the allocation plan as the 24-25 budget package.

So as you can see, in our current year 24-25, $1.2 billion is being dispersed out and in the upcoming budget year 25-26, $1 billion is expected to be planned to be dispersed. And just to note, under the Governor's 25-26 budget package, he makes no changes to this allocation schedule.

So under the Governor's budget, this allocation plan in the figure is expected to go forward as proposed. So turning to page six so SB-125 included accountability measures for the relief funding. It put the California State Transportation Agency in charge of overseeing the accountability program and CalSTA is also responsible for administering the two funding programs that I described.

Agencies to receive funding each fiscal year are required to submit operator data or short term regional plans. These short term regional plans must demonstrate how the region will address any operating deficits and justify how they're splitting funding between capital expenses versus operational expenses.

All agencies are required to submit long term plans to CalSTA by June 30, 2026, and these plans are required to outline strategies for sustaining the region's transit agencies in the absence of additional state funds and compliance is required in order for agencies to receive future funding from the Transit Intercity Rail Capital Program's baseline competitive awards.

SB-125 also included statutory relief measures by extending previously approved ones that were approved in prior budgets through 25-26.

This included suspending financial penalties that certain transit agencies face under existing programs for not meeting certain requirements such as farebox recovery rates, implementing hold harmless provisions that ensure that revenue-based allocations use pre pandemic data and allowing the State of Good Repair Program to be used on operations.

And historically that program has been tied to specifically to maintenance and repairs. And turning to page 7, SB-125 also created the Transit Transformation Task Force which was required to be convened by CalSTA and this task force was required to include state agencies, academics, local transit agencies and other stakeholders.

The task force is required to develop policy recommendations aimed at increasing transit and improving the transit experience for all users. And CalSTA, in consultation with the task force is required to submit a report to the Legislature detailing its recommendations and findings by October 31, 2025. With that, that ends my remarks and happy to take any questions.

Thank you very much. We'll now move to Mr. Taylor from UCLA. Welcome.

Thank you very much Chairman Wiener and Members of the Committee. It's always an honor to speak to the Legislature. I've been asked to just give an overview of sort of the state of transit finance and ridership at a pretty high level. I'm going to do that.

I just want to say at the outset that there was a lot of discussion, really interesting discussions beginning related to land use, housing, public transit. I just want you to know that we're doing research on that at the Institutes of Transportation Studies.

And while that's not part of what I'm doing here, we're glad to provide information relative to that, should you have an interest. So I want to begin with three things about public transit finance. And this is sort of broadly over a long period of time. And the first is that really no two agencies are alike.

And what I mean by that is that if you look at school districts or mosquito abatement districts, they're often going to have a similar set of funding sources.

Transit is unique in that each transit agency can have wildly different sets of revenue sources that come from local county sales tax measures from various cities that provide parking revenues, their eligibility for federal funding. So that it's really uneven and it's very hard to generalize about the financial state of any one agency.

The second thing is that is that farebox recovery has been sliding for over a century. Leading up to World War II, most transit systems were private, for-profit enterprises and most of them paid for all of their capital and operating out of the farebox.

And over time, as it's moved into public ownership and we have larger social goals for transit, the farebox recovery has been declining. So while we have had a drop in farebox recovery since the pandemic, it's not like it's unprecedented. This is something that's been going on for quite a while.

And again, that level of farebox recovery varies a lot from agency to agency. And third is that in general, it's much easier politically and popular with voters to fund capital investments in public transit than operations and maintenance.

It's just human nature that people like ribbon cutting ceremonies, they like new projects, and that paying for repairing buses or rolling ephemeral service out on the street tends to struggle more for funding. So in general, especially at the federal level and at the local level, the sales taxes, that's very capital oriented.

And often operators are going hungry for operating and maintenance funds when there can be plenty of capital funds available. Now turning to the next page, public transit in California since the 1990s. One is that we have to step back and say the state has made big bets on transit.

And a lot of it has been through the county sales tax measures around the state, but through a variety of programs, the Federal Capital Program, we've done a lot to improve transit since the 1990s, we really have. We've expanded rail transit significantly bus services expanded. We have better ADA service for those with disabilities.

A lot of things have improved. And it's important to acknowledge that. From the 1990s into about the Great Recession, we were seeing a gradual growth in ridership statewide. Now, it varied again from operator to operator, but things were on the upswing in terms of use of public transit. It's really been a rocky road since then.

The Great Recession really set ridership back. Things tumbled a bit, which is very common. Transit ridership tends to be more sensitive to economic fluctuations than driving, for example. And so things popped down. It started back up, but then some issues resulted.

And here, if you turn to the next page four, you see the same graph that we just saw in the previous presentation, which is that slide down from about fiscal year 2014. During that period, it was actually the star of the state was BART. BART was actually adding riders during this time.

And it's really important to think about this in terms of two markets for transit that exist. One, are people, people who, because of age, income or ability, don't have the ability to drive. They don't have access to a car, they're not physically able to drive a car. They depend on transit for mobility.

The second are people who are traveling to places where parking is difficult or expensive. So these are downtowns, downtown San Francisco, universities, airports, places like that. These two fundamental markets. Prior to the pandemic, it was really those that first group, the people who have limited auto access, who were causing a lot of this erosion.

How was that happening? It was two ways. One, it was that auto ownership was going up across the income spectrum, but it was really affecting lower income households. You were having fewer, zero vehicle households. Fewer, more people were moving in, having at least one vehicle. Other households were adding two vehicles.

So to go to the Senator's point is that you had lots of people who might have been riding 25 times a week. Now we're in a household where there was maybe a car available, they're still riding, but they're riding five or seven times a week now.

The number of riders didn't change, but ridership dropped a lot as a result of that. And that's kind of what was going on. At the same time, we were actually seeing a growth in people traveling to those places where parking was difficult and expensive.

San Francisco, downtown San Francisco was really the shining star for the whole state with that. But you saw it in San Diego and other places so that you had more people who had cars available but were traveling into big office centers, were doing more commute, oriented services. And we saw those kinds of services rising.

So we had essentially a decline in the relative share of lower income riders and an increase in the relative share of higher income, more resourced ridership. That script flipped in the pandemic.

In the pandemic, those lower income riders still were riding or to some extent and have come back pretty well, but you saw a real big decline of those people who were traveling to those places, to the office and going in twice a week rather than five times a week.

So the composition of these declines really varied by those two. Okay, turning to the next page, what we can see is a lot of it reflects what kind of a transit system had which mix of those two kinds of riders helps to explain whether they recovered most of their riders or partially.

So you can see San Diego MTS at the top has recovered pretty much all of its riders and in fact has exceeded that for some months last year where BART is really below about half of their riders. And again a very large share of BART's ridership into and out of downtown San Francisco.

Big decline in the amount of the density of workers in that and that helps to explain those big differences. If you go to the next page, we can see that we had this pandemic collapse. It's recovered unevenly.

In general, systems today that serve a larger share of lower income and transit reliant riders have tended to recover more to their riders and are doing better in terms of ridership and typically financially.

And commute oriented systems, again, those that are centered on those downtowns, those other big job centers have tended to struggle more to win back riders because they're just not traveling to those centers as frequently.

So likewise, buses have tended to recover more riders than rail, not because they have rubber tires versus steel wheels, but the nature of the networks and the kinds of service that they provide. The rail tends to be more commute oriented.

If you turn to page 7, you can see that the ones the systems statewide that have recover the fewest riders are not all just commute oriented services, but the ones that are down most since the pandemic are Caltrain in the Bay Area, Metrolink in Southern California, both commuter rail systems, and then BART, which is a mix of a heavy rail urban system and sort of a commuter rail hybrid.

And those systems are still there because their markets have changed pretty dramatically. So if we go to the next page, we can see that these systems are tending to struggle more with riders often are in the worst shape or the most difficult shape with respect to finances. They're most likely facing financial cliffs.

And that's because they tended to fund more of their operations out of the farebox than other kinds of riders. To go to page nine, you can see on the, I won't say x and Y axis, on the vertical axis is state support, and you can see OCTA over there in Orange County. And then on the horizontal axis is the amount of income that supports the operations and that you can see that Caltrain is out over 75%.

Yes, I think this is a really important issue, farebox recovery. And I remember I am often wrong, but sometimes I'm right. And one of those areas before the pandemic, I used to get into arguments with some of the transit operators in the Bay Area that were extremely high farebox recovery 70-80 %.

Because sometimes they would brag about it like, this is something that we're so proud of, that we have 75% farebox recovery. And I would say, no, that is an indication of societal failure, that we are not adequately funding these systems out of tax dollars.

And that means that you will have continual pressure to raise fares, to have increased funding, because that's how you fund yourself. And lo and behold, now we have this situation where high farebox recovery has been the most disastrous.

And when you look at other countries that have very successful transit systems and have low fares, the fares are low and they use tax dollars and frankly, they give the transit systems more real estate ability to basically generate revenue for the systems. That's at least my perception. Can you just comment on that? Just in terms of how we.

I can. Permission to go slightly nerdy here?

Okay, thank you. So we do an odd thing in the US in that we silo capital funding and operations and maintenance funding. And so because of that, when we say farebox recovery, we're talking about the share of operating costs that are paid for out of the farebox. We ignore all of the capital costs.

Yes.

So if you look at these high farebox recovery systems, they tend to be rather capital intensive systems. So if we actually amortized all of that capital incorporated in. To a taxpayer, a dollar is a dollar, they don't care whether it's categorized as capital or operating.

And in many other parts of the world, they just amortize all their costs and account it that way, so we would see actually less of a spread here.

You're right in the extent that they often have fares, but what they've done is they have urban environments that have been carefully curated to be so congruent with transit use, even with relatively low fares. They get significant revenues from the farebox, but it's a lot of people paying a relatively small amount.

So you can't say that they're just uniformly low farebox systems. In some Eastern European, they've gone fare free. That's a different story. But in general, the way you're describing this is correct. Except I would say that the one thing missing here is that we're really excluding all of the capital.

So a bus system is going to be less capital intensive because its right of way is essentially roads that are paid for by other sources where rail systems have to pay for their own right of way as well as the vehicles which tend to be more expensive.

So if we amortize that over time and depreciate it and incorporate that in, we get a very different picture. We just don't do that in the way that we organize funds here.

Sure. But the capital is also very variable.

Yeah, that's my point. So those three systems that have the red circle around them, those are all really capital intensive systems. So you can think of it as that they've pushed more cost into the capital part.

They have relatively less labor going for it because you essentially have one train operator that can do a 10 car train versus multiple bus operators. So labor costs are much higher. Speeds tend to be lower.

So you tend to have a lot more labor costs in a bus system, which means they have relatively more operating costs per passenger, but they have much fewer capital costs per passenger. That's just my point and the distinction.

But I think your point, which is if we're reliant on farebox recovery, that makes us, that makes systems vulnerable to changes in patronage, and that's absolutely correct.

And puts pressure on raising fares because that's the main way that they get money on a year in, year out basis. Like they like, for example, Muni gets significant funding from the San Francisco General Fund. So the farebox recovery is much lower for Muni than it is for BART or Caltrain.

And so Muni has not had the same pressures in terms of continually raising fares for BART and Caltrain. BART and Caltrain are expensive. They're expensive systems for people to ride. And it's not a criticism. That's how they are able to generate more funds. But that's one of the, to me, one of the downsides of having that higher farebox recovery.

I would agree with that, but I would also note that the average household income of a BART or Caltrain rider is significantly higher than of an AC Transit rider or a Muni rider. So that in a sense the variance in the fares is somewhat progressive.

I wouldn't say not for BART. BART has a significant low-income ridership.

They do. And especially post pandemic.

Okay, thank you.

Another question, Mr. Chair, if I could. In assessing the operational results, the, shall we say, the profit and loss of transit systems, does that include amortization of capital costs or is it only variable operational costs?

When we're talking about things like farebox recovery, we're talking about only operations and maintenance costs.

But in the assessment of the performance of transit systems, in other words, when they're looking at their own financial results and assessing that, is it only revenue less operational costs or is it revenue less operational costs and amortization of capital?

It's typically doesn't include amortization of capital. And the argument that the operators would give you, which is that most of the funding that goes for capital is earmarked specifically for capital. So there's no option to make shifts between capital investments and operations.

Since it's earmarked, they don't have any capacity to make any sort of changes like that. So they tend to focus on the operating costs. But in general, you make a good point, is that, you know, for decision makers, it would be good to look at the, at the fully amortized.

Reason I asked the question is because this came up in our progress report relative to high speed rail about a year ago. And it was news to me as I reviewed the information leading up to the testimony that in terms of assessing and forecasting the operations that there was no mention of capital costs.

And so I raised the question, since the Proposition that initially authorized the system required that the system be self-sustaining, that if you're eliminated eliminating capital costs, then you're not really assessing self-sustaining. And I was told, well, that's typical in public transit. It's not typical in accounting generally.

So in terms of assessing the true results of transit systems, whether it be high speed rail or Caltrain, or these regionally based and community-based transit systems, you're really not assessing the true financial results, the ability to cover both operational costs as well as capital costs. Just a comment on part of this particular bean counter.

Yes, so that is right, but we also tend not to count what we call external costs. So there are lots of things that external costs and benefits that are really important to calculations, especially in the public sector, that we'd want to pay attention to.

And we talk about things like emissions and a variety of things like that, that when we account for that, we could get slightly different measures as well. But you raise a good point. But I think there's a whole set in the public sector of ways that we'd account costs that would be useful and informative.

And I think that not accounting for sort of negative external costs, for example, of, of trucking relative to rail freight and things like that is really important to do as well. So there's quite a bit in that. But I don't want to digress too far from this, so let me just move on for one second here.

So if we look at page 10, you can see again that it really has varied from operator to operator how much this is a measure of funds that come from income, which is usually counted as fare and other directly revenue sources like advertising and things like that.

And you can see that those high farebox recovery systems, and I put an arrow there for BART, for Metrolink, and for Caltrain, you can see the biggest drop. But it's a drop for every system, but at different levels in terms of how they were affected.

So I think the lesson from this is that there has been this general post pandemic effect. It's varied dramatically from operator to operator. Okay.

And then the last thing I wanted to mention is that just as it's hard to characterize the funding of any individual transit system, it's hard to characterize the funding that each state does to support transit. Some of them provide significant support, but mostly for capital. Again, others have big operating support programs.

What we've done here is shown the five largest states in terms of unlinked passenger trips in those states, not riders, but actually unlinked passenger trips. And you can see that California is at the low end in terms of the support of operating with Massachusetts and Pennsylvania.

Just to be clear, this is a really important slide. Page 11, slide 11. You look at Massachusetts, Pennsylvania, New York, just dramatically higher levels of support than California. That's just a really important slide.

I would note one other thing here, is that many people are surprised to learn that there are actually more trips on yellow school buses nationwide than there are in all public transit systems combined. And California is near the bottom of the country in terms of financial support of yellow school bus service as well.

So in terms of overall support of what you could call transit service, broadly, if we were to combine, that would be even lower than this.

Yeah. And we see that play out at school sites when neighbors get really unhappy, that tons of people are just like double parking and dropping their kids off. And we'll need to wrap up this panel soon.

Yes. So just the last slide is number 12 is that the California ridership has been lagging not just since the pandemic, but since the Great Recession. The effects on transit ridership and on fare revenues were dramatic and are still ongoing. These ridership fiscal effects do not affect all transit systems equally.

And it's really important to recognize that some are really facing fiscal cliffs, others are doing okay. No one wants to say, yeah, we're in great shape, but they're doing okay, and that California generally supports transit operations less than other high transit use states nationwide. Thank you very much.

Thank you so much to both of you for setting the table. We'll now go to the second panel about recent state investments in transit. And we'll be hearing from Mark Collisions, the Undersecretary of CalSTA, and Michael Pimentel, the Executive Director of the California Transit Association.

Great. Well, thank you, Mr. Chair and Members. I'm Mark Tollefson. I'm the Undersecretary at the California State Transportation Agency. Really excited to be here to be able to talk about transit funding in California. Really appreciated the earlier conversation on the dais. I think that just really underscores the importance of this topic overall.

I do have a slide deck before you. Hopefully you all have that in your packets that'll kind of used to kind of guide my comments here. I know that a lot of what I was going to talk about actually did get covered a bit by Mr. Jimenez.

So I won't spend a lot of time just reiterating about SB-125 and the importance of those funds. But as mentioned, that is the $5.1 billion that was provided to our transit agencies for both capital funding and operations really shot in the arm for most of our transit agencies as they continue to recover post pandemic.

So I'll go to, let's go to slide number three. You'll see a nice picture of the state and a lot of our investments from our Transit and Innercity Rail Capital Program. That's really one of the flagship programs from CalSTA that we administer.

Over the years, since 2015 and its inception, we've actually invested more than $11.5 billion for 153 projects throughout the state.

You'll see on the map there in front of you that really with this program, the exciting thing is just the geographic diversity of the investments that we made all the way from the kind of north coast all the way down to the border in San Diego, a lot of important projects.

This past October, we were able to invest 1.3 billion for 27 projects. And then in, if you look at all the dots on the map there, since 2023, over $4.8 billion has been invested in transit and passenger rail projects through this program.

For the investments that we most recently made, some just key facts that I think will be helpful just to kind of think about the importance of transit. Those 27 projects are expected to reduce greenhouse gas emissions by more than 34.3 million tons. That's the equivalent of taking about 1.3 million gas powered cars off the road.

So really important programs, really important projects all throughout the state. If you go to the next slide, I'll pivot back to SB-125 and really where we are in that process. So to date, for our first tranche of funding, which was about $2.4 billion, about 2.2 billion of that has been approved, about 27% has gone to operations.

The other 73% towards capital. And I think this goes to the Chair's point that he made about the origins of these funds, where that first 4 billion was really intended to be capital that was then flexed to allow for that to also cover operations.

So you'll see that's really part of the reason why that number for capital is so high. To date, if we go to the next slide, 45 of the 49 agencies have requested their initial allocations. 40 of the 45 that we've received, we have approved. Remaining five agencies represent about 7% of that overall total.

The agencies that we continue to work with who have not yet submitted requests are a lot of our smaller operators or smaller counties. Colusa, Glenn, Modoc and Trinity. They represent about $11 million over the life of this program, which is about 0.001%.

So in terms of the dollars that are going out, the majority has actually been received by our agencies. I did want to talk a little bit about the short term financial plans that were required to be submitted as part of the program. This was one of the accountability measures.

So with these dollars, tell us what you're going to do, what you're going to spend those dollars on. A few lessons or a few kind of, I guess, learnings that we've had from that. Overall to the point that it was made before a lot of those dollars are going towards capital expenditures. 73%.

About a quarter of the agencies statewide have committed at least a portion of the region's share of SB-125 dollars to cover shortfalls for previously awarded projects. This goes back to again, the origins of those dollars being capital driven.

But that's about 40% of the funding going towards those key priority projects throughout the state, totaling about 2 billion, mostly from our larger operators and agencies. We've also noted that a lot of our agencies have used their funding to continue the transition to zero emission fleets per the ICT regulations.

We'll get into the Transit Transformation Task Force in a bit, but a lot of robust discussion around that in our task force meetings. And another thing just to reference. So for a lot of our new facilities that get built, oftentimes those aren't as competitive through a lot of our capital programs.

So the SB-125 dollars have been used for a lot of the new facilities to accommodate that zero emission transition. If we go to the next slide, slide 6 in your deck, just the upcoming milestones that we have. So for the 2024-25 fiscal year. We did release our guidelines on January 10th.

The first set of reports, allocation summaries in the first annual report are due by the end of this month, on the 28th. We expect to allocate the roughly $1 billion that's available for 24-25 no later than April 30th of this year for all of those agencies that do submit their reports. Let's go to the next slide.

So in terms of the accountability, one of the big pieces to this were these long term financial plans. That was a requirement that was built in by the Legislature. Those plans are due June 30th of 2026.

Those plans are intended to address a number of different things really to provide you, provide us, the Administration, a lot of the kind of base information about the status of all of our transit agencies. Those plans had to address ways to sustain each region's transit operations absent additional funding, demonstrate some of the ridership retention and recovery strategies.

So we are really looking forward to diving into that data as we move forward. Let's go to the next slide. So as far as accountability that was built into SB-125, it was referenced earlier, the Transit Transformation Task Force. I have the honor of chairing that task force.

We do have 25 members across transit agencies, small, large urban, rural, state, governmental entities, local agencies, advocacy groups, academia and labor. It's really been a great forum for discussion as far as SB-125 and the requirements and I'll get to that on the next slide.

There are a lot of things that this task force needs to cover, a lot of items to really show where we can go with transit, how we can make it more convenient, more reliable, safer, how we can grow our ridership moving forward.

So from that group we have a number of folks, obviously as I mentioned, from a number of different backgrounds. It hasn't been the easiest task force to manage just in terms of where folks are, what their intentions are, what their needs are. But at the same time, it's been a really great forum again for that discussion.

So as we go to the next slide, it really outlines just all of those requirements that we had from the Legislature in terms of topics that we needed to cover so far. We have now had eight meetings of the group. We have covered all of those statutorily required items.

Not to say that we have consensus on recommendations for all of those items, but we have moved forward with probably 50 plus recommendations from that group.

The intent of the task force is really to, in October as we have to present that report, is build you kind of a menu of options, if you will, for not only the Administration, but the Legislature to help move transit forward.

A lot of those recommendations are going to vary in degree of kind of impact, but we are looking at everything across the board as we move forward. Some of the big topics that obviously are going to be a little trickier are some of the items that we're required to tackle, such as reforming the Transportation Development Act.

Looking at things. Is farebox the right metric to allocate funding on? Looking at things such as new funding options to really sustain transit over the next 10 years. So really some of those big items that will continue to be a big part of our subsequent meetings as we move forward in building towards that final report.

If you go to page 10 on your slide deck, this really outlines a work plan and timelines that we're operating under. So we actually just yesterday had our 8th convening of the task force down in Riverside. Our next meeting will be March 11th here in Sacramento.

Really encourage staff folks from the audience to join us there to tune in, provide public comment. That's very helpful for us to really guide our discussions as we move forward.

But in terms of the next steps in building towards that report, we'll probably spend the rest of this month through April preparing that report, which we intend to release in multiple tranches throughout the summer. There's just so much and so many items that we need to tackle as part of this.

That way we'll be able to have our task force members easily digest that, get that out into the public, get feedback, ultimately building towards the report that would be released in October.

So we do plan on releasing different kind of volumes, if you will, of that report in May, July, and then in September, and ultimately finalizing that before October.

Quick question, Mr. Chair?

Yes, actually, Senator Blakespear had a question first and then to you, Senator.

I mean, I think you're on your last slide, right? Do you want to finish or did you finish? Okay, great. Well, thank you, Mr. Tollefson, for your work on this and congratulations on being either appointed or voluntold to go over to the High-Speed Rail Authority.

I'm not sure if that was something that you sought or not but is definitely a fraught time for high-speed rail given the federal environment. So I look forward to your success in that role. And who is going to take over leading the Transformation Task Force?

So it is my intent to still be there for the March meeting and then as we move forward, we will be working kind of internally about who my successor will be in my existing role, as well as leading that task force.

We do have a great team behind this, not only from CalSTA, with our Chief Deputy for rail and transit, Chad Edison, as well as Anthony Serna, who's here with me as well, we have a team with McKinsey and Highlands that are really supporting some of our efforts.

So, yeah, we don't expect this to really miss a beat. We understand the importance of this, so that is something that we are highly focused on. But I don't have an answer for you at this point.

Okay, well, great. I'm glad that you're committed to not missing a beat because I think that's really important. And I also, you know, I frequently think of the aphorism that a goal without a plan is just a wish.

And so when we have these goals, like moving from 2% to 20% transit and train ridership, with different definitions of ridership in that, but just recognizing the ambition of that, you know, we need that plan.

And I really am hopeful that you stick to this timeline, that we don't ask for extensions and also that it is specific and detailed enough to be actionable for us. Because I would like to see a plan.

And so I know that there are many different ideas that I've had as a Legislator being interested in this topic of transit and trains that it's been suggested to me that I wait to see what's produced from this Transit Transformation Task Force, because these are the people who are really working in this area and there's technical expertise and you're putting serious thought behind this.

And so I'm really hopeful that that's going to be substantive and actionable. And so I just encourage you to continue on your path and to have that as the ultimate goal.

Yeah, I appreciate that. And what I will say is that, you know, if we think about October, that's still a long time from now. And then once those recommendations ultimately get implemented, obviously working with the Administration and the Legislature, we're looking probably into 2026.

So there are going to be probably some pieces of legislation that you all on the dais you introduce that really do tackle some of these issues that we can also highlight in the report as we move forward. There are things administratively that we have learned just in terms of our own processes.

A lot of discussion yesterday just about ways that we can streamline our grant processes, how we as Caltrans and CalSTA can move things quicker in working with our transit agencies and our partners.

So definitely some of those things that we're not going to wait until October to necessarily implement, some of the things that will help advance transit moving forward. But there are also some of those issues that absolutely will require that conversation with all of you as well as the Governor and the Administration to move them forward.

Okay, great. Thank you, Chair.

Senator Niello.

Just a quick question. With regard to the members of the task force, I don't see any representatives of employers. Was there any consideration like the Chamber of Commerce, the Business Roundtable, NFIB, something like that?

Yeah, we were a little bit, I would say, limited as far as the legislation in terms of kind of who needed to be represented on the task force. We already have a 25 Member task force, which as you can imagine, does become tricky to come to consensus.

Not to say that this has to be a consensus task force by any means. But what we do have, which to get to your point, Senator, is a technical working group where depending on the issue that we're addressing in the next task force meeting, our teams will meet with other folks representing industry, representing some of the agencies that maybe aren't represented formally on the task force to get their feedback, to get their opinions on certain items that we can bring forward to the task force.

So that is the way that we are intending to bring in some of those other groups who aren't formally represented.

Okay, thank you. I was just saying in the Bay Area, we very much work closely with the business community and some of our large employers are some of the strongest champions of transit because they understand their employees rely on it. So that is important.

And then Chair, if I may, you know, I will note that also, you know, Jim Wunderman from the Bay Area Council is represented on the task.

Yeah, that's the Bay Area Council. It's a major employer group. Yeah. Senator Choi?

Hi. Undersecretary Tollefson, I'm Steven Choi. I come from Orange County, inland area. Our situation is a little bit different from other areas, largely depending upon individual cars rather than public transportation. And there is Metrolink, and the train is very popular from San Diego, Oceanside to LA area.

And when I was a member of the Scag, I did rely on Metrolink and I found out that's a very popular. And also Irvine happens to be largest ridership for the train. So I do realize the importance of public transportation. And then also internally, City of Irvine has its own transportation system.

Buses running around every 30 minutes from key locations like attractions, popular entertainment centers, and connecting Metrolink train station to universities and other shopping centers. So that people can come to Irvine and instead of driving to rely on Irvine's own transit system. So I know it's very efficiently run.

And because of the geographic conditions still so many people prefer to ride their own vehicles. And when I see large buses Aussie bus running around in our city, I try to look inside how many people are riding sometimes empty. If not maybe 2-3 people in there, very low riderships.

And why does it have to be so large vehicle running around on time whether there are riders or not? I know there are a few taking advantage of the bus system coming I guess largely the laborers from outside cities coming to the City of Irvine. But I'm sure there are other similar cities like Mission Viejo, Laguna.

Those are not really well equipped for a transportation system for like buses. But the buses do run around. So I was thinking maybe and nobody has mentioned that system now in California by 2035 as I remember that no fossil fuel vehicles will be allowed to be sold or will have to be all EV or hydro.

Is that right? By 35 okay then the more ridership by the we're not going to worry about. Let me track back the buses I see they are running around, they are not 100% electric vehicles. They are still using gasoline and regardless of riderships they are still running around.

So that is when we consider environmental and trying to reduce the vehicles on the road. But the vehicles are still the transit buses are still running around. And that adds whether there are ridership or not still running because they are scheduled.

So 2035 will come around very quickly and I think one area is converting all the bus systems EV operated buses will be ideal pretty soon. I think that is another capital matter who can handle that.

But since we have over or other computer in a way more systems that we call if we can allow some regular writers to use those public on demand calling systems or like OZTA may contain smaller vehicles from regular sedan to mini size and then equip them with the all electric vehicles in the standby.

And for those who qualify who are riding can call up just like Uber and they can respond. And strategically and geographically few vehicles will be stationed each city. So that'll be efficient. And then without my scientific calculation I feel like that will be a lot less cost than the big buses running around with fewer riderships.

I wonder your office have any kind of that kind of different access than trying to keep operating the traditional system that we have.

Yeah, thanks Senator, really appreciate the comments there. And I think what I would say to that is that our goal is to really make transit safe, reliable, convenient, ultimately to be competitive with a single passenger vehicle. But to your point about the different models, I think transit absolutely has to keep evolving.

We have seen a lot more micro transit opportunities. Some of the on demand transit and each transit agency and geography is going to be unique in terms of what the right kind of method of transit that they deploy is going to be.

In terms of Orange County, obviously those are great conversations to continue to have with OCTA to see about their model. You know, looking at, you know, are they, you know, identifying alternate routes that maybe, you know, pick up more ridership so you're not seeing buses that are, you know, large buses that are driving around empty.

So I think those are absolutely conversations that need to be had. But I will say that there are a number of different models that a lot of transit agencies are, you know, kind of looking at to better serve their constituencies.

Yeah, still City of Irvine and also Orange County Transit Authority, they do operate I think a medium sized bus to serve seniors who are pre-qualified and registered. And they are allowed to call and they have certain fees to still they pay to that but they are not operating unless the caller demands and asks for the ride.

So they are not running around all the time. So if we, like I said a while ago, either using Lyft or Uber kind of existing system that's using commercial system is one way, or we can use a combination.

Certain stocks of those emission free vehicles will be purchased and since there are so many EVs available, we can buy them and OCTA can stock them in headquarters and other regional strategic locations and those will work.

So just Uber or Lyft kind of systems, the computer on call demand system like commercial ones so we can model after them and that'll be to me it'll be much, much cost saving method and prohibit all the empty buses running around without actual, you know, rider in it.

And that cost, think about it, purchase price of the large bus operator storage. And that is a big, you said 25% of all the operating cost. 25 is out of $5.1 billion for what five or six years that you have gotten. I mean that's a huge amount of money.

I tried to divide that amount of money by about $30,000 that gave me about 170,000 vehicles you can even buy and provide them. I don't know how many riderships we are all totally dealing with. So anyway, this is a different mode of thinking for you to think.

Thank you, Senator Choi. You want to.

Yeah. Appreciate that. And one of the things that our task force is also looking at are just ways to leverage technology, you know, not only to improve the efficiency of our operators, but also to improve the user experience.

So you have a little bit more of that certainty, like you would with the Uber, of when the vehicle's coming and when you'll get to your destination.

Great. Thank you very much. Okay, we're now going to move over to Mr. Pimentel. Appreciate that presentation and proceed.

All right. Good morning, Mr. Chair and Committee Members. I'm Michael Pimentel, Executive Director of the California Transit Association, and I'm pleased to be with you this morning to discuss the State of Public Transit in California and our industry's ongoing work to recover from the pandemic.

As I begin my testimony today, I first want to thank the Legislature and Governor Newsom for acting decisively in the budget act of 2023 via two bills, AB-102 and SB-125 to approve $5.1 billion in multi-year funding for public transit capital projects and operations and for protecting this funding from potential rescission in 2024.

Now, given the criticality of this funding to California transit agencies, we were heartened to see that the Governor proposed to honor the state's commitment to providing the remaining balance of this funding in this year's budget.

As an industry, we will be supporting, supporting this action as budget hearings proceed and the budget act of 2025 begins to take form.

Now, given the specific expertise available at this hearing through CalSTA and several transit agency leaders, I'll largely defer to my fellow panelists to speak to the funding that has been allocated today and the precise uses of these funds at the regional and local levels.

As the leader of the organization that worked most directly with you to move SB-125 forward, I will identify at a high level how regions and transit agencies have worked to advance the statutory intent of this funding. While following through on our commitment to transit.

Of transformation. When I joined you in 2023 with a call to protect the previously approved $4 billion in funding for the TIRCP against a $2 billion proposed cut and to deliver flexible multi year transit operations funding in the Budget Act of 2023, I noted that these actions were necessary to address funding shortfalls caused by, and I quote, lost transit ridership, itself a function of changed commute patterns, rider safety concerns and our state's housing affordability crisis, which had reduced increased operations costs driven by a tight labor market and supply chain shocks to our nation's fuel supply as well as increased capital costs resulting from supply chain issues, inflation and the adoption of more expensive and, I'll note, mandated transit vehicle technologies.

In enacting SB 125, the Legislature and Governor directed that this funding address such conditions by requiring regions to submit funding plans to mitigate service cuts, fare increases or layoffs and support ridership improvement strategies such as coordinating schedules and payment systems and improving the cleanliness and safety of our systems.

And of course, to make continued progress on major capital projects and at the highest levels, regions and their agencies have directed their funding shares to several broad categories of investment which align closely with the predicate for a request and that conform to the statutory intent and these broad categories of investment include agency stabilization and ridership recovery.

This is inclusive of service and workforce retention and restoration and security and accessibility enhancements. It also includes transit transformation. This is inclusive of service redesigns which in some cases are focused on addressing the needs of priority communities. It also includes the introduction of open payment systems, development of bus only lanes, fleet modernization and major capital project construction.

And finally, these categories include zero emission vehicle transition. This is of course inclusive of zero emission bus purchases but also charging and refueling infrastructure buildout and resiliency improvements necessary to meet ultimately CARB's innovative clean transit regulation. Now, the importance of these investments is evident in the ridership gains we have seen across California transit agencies over the last few years.

Today, ridership in California stands at approximately 71% of pre pandemic levels and this is an average of the high ridership recovery of systems like San Diego, MTS and LA Metro, as noted in the staff report, and the comparatively weaker recoveries of commuter based systems like Barda Metrolink.

As we've heard discussed earlier today, as regions and transit agencies have put their money to work, they've also taken steps, primarily through my Association, to address transit's most pressing challenges by advocating at the state level for new statutory tools and reforms. This work is currently proceeding on two timelines and will become increasingly visible this year.

In the short term, our industry is advancing two bills to deliver what riders say they want from faster and more efficient public transportation services and safer rides.

This year my Association is co sponsoring with SPUR and the Bay Area Council Senate Bill won by Senator Scott Wiener and this is legislation that would eliminate the sunset date on CEQA exemptions for clean transportation projects, including the very project types that help increase transit speeds, reliability and attractiveness like dedicated bus lanes and transit priority improvements.

Additionally, my Association is co sponsoring with the amalgamated transit union AB394 by Assemblywoman Wilson. This is legislation that would provide transit agencies with additional tools for combating assault and battery against our frontline employees and our riders.

Now to deliver more holistic and transformative changes to public transportation over the midterm, our industry has actively participated in Cal State's Transit Transformation Task Force. As you heard, this is a 25 Member task force. It includes 12 Members from my Association and has been meeting bimonthly with the goal of delivering a report of recommendations to you all by October 2025.

Now, to inform our participation in the Task Force as an Association, we've coordinated with our sister Association calact to survey our Members on the challenges they face in delivering transit services and projects and also on their recommendations for addressing these challenges.

And with the direction of my Executive Committee, that's our board of directors, we established a 14 Member internal Transit Transformation Advisory Committee to exhaustively review and vet these survey results, the findings of academic literature and our past legislative programs, and develop industry recommendations to inform the Task Force's discussions. This Advisory Committee meets several times before Task force meetings.

Usually it's about three to five times before each meeting and to date has provided the Task Force with detailed and we believe, practical and implementable recommendations covering the topics including, not limited to, transit priority, safety and cleanliness, workforce recruitment, retention and development, TDA reform, zero emission Transition, funding and reporting, oversight and Grant Administration.

Alongside this Association level work, regions and agencies have continued to scope new self help measures intended to address remaining operational needs because to be clear, SB 125 provided a short term lifeline to transit agencies, but it is not a solve to long term fiscal challenges as we build toward a better transit future.

I would also be remiss if I did not acknowledge that public transit in California faces tremendous uncertainty in the years ahead. The new Federal Administration has issued, as you heard in the Chair's opening remarks, a series of Executive orders and agency level memorandums that potentially threaten essential funding which we previously viewed as safe and predictable.

What's more, persistent inflation and the potential for new tariffs may make core aspects of our operations more expensive. These external shocks, should they arrive, would come at a time when agencies have hit the recovery stride, but are facing in some cases imminent questions about their mid to long term fiscal health in the absence of new support.

Finally, while agencies are preparing to pursue self help in some regions, we'll see that there will be timing issues between when new funds are needed and when they are available. And of course, there's no guarantee that such measures will actually see success at the ballot box. Now this uncertainty and the fragility of our recovery underscores a need for heightened state support for public transit.

And in the weeks and months ahead, we look forward to engaging the Legislature and Governor Newsom in discussions on what the support could look like if we were to address the baseline of transit funding needs while also supporting the expansion of public transit to meet our climate and equity goals.

And I'll note here that this discussion will need to include a discussion on cap and trade reauthorization, the ongoing support that that program provides to public transit. Currently it's 15% ongoing revenues on an annual basis being directed to toward public transit.

And what more can be done to address the emissions impact of the sector that contributes the most to climate change. And that would be transportation here in the State of California. Now, as always, appreciate the opportunity to join you. Look forward to the discussion. Happy to take any questions. Thank you.

Thank you. One question to be to either of you, but I'll direct to Mr. Tulson. We've been hearing about third party permitting delays leading to cost escalation. So transit systems, when they're doing capital work to build new infrastructure, they have to rely on permits from cities or from or permission from utilities or telecoms or cable companies.

And if that is slow or there's just non response, it can just hit the pause button on an entire project which can just explode the cost if a contractor has to demobilize and then mobilize. And so is this project delivery reform, which this is sort of part of, is that, has that been discussed in the task force? And can you just provide a brief update on that?

Yeah, really appreciate that and appreciate the question. So a few things, I know that transit is not immune to a number of the challenges with respect to permitting. And all of our regulatory agencies appreciate the Legislature's work with the Governor two years ago on putting forth the streamlining package.

I think there's still more that can be done, particularly as it pertains to transit. To your point, this has come up a number of times. For our next meeting that's going to occur in March, we actually have a topic about how we can work to drive down some of our capital costs.

And a big part of that will be, you know, some of these issues with respect to permitting. So I'd say that a lot of our kind of robust discussion and recommendations will probably come out of that March meeting.

But to date, we have addressed, you know, a few issues, and I just jotted down a few, you know, kind of notes of what's been approved. So one of the strategies that we have focused on is expediting delivery of transit supportive infrastructure and strategies.

So a couple of the recommendations that have actually been approved by the task force thus far, which will require work with the Legislature and the Administration. One of those recommendations is to allow for exemption or preemption of local and state permitting requirements on identified priority transit routes.

Another one is to establish, by right, permitting a mechanism for transit infrastructure, bus shelters, transit priority inside each city and on the state right of way.

So very kind of broad in terms of the kind of context of that, but really shows the importance of what we've heard from our task force Members, from our technical working group of ways where we need to explore every opportunity to really speed up the opportunity to create transit priority lanes, for example, bus shelters, and that, in turn will drive down some of those capital costs that we're seeing.

Yeah. And the CEQA Bill that we're working on with Mr. Pimentel in terms of extending that and expanding it should be helpful. But we look forward to working with you on those various issues. Absolutely. Great. Well, thank you to both of you for everything.

We'll now move on to our third and final panel with three representing three of our transit operations. I want to welcome up Julie Kirschbaum, the acting Director of Transportation for the San Francisco Municipal Transportation Agency, which operates MUNI, among other things, Michael Turner, the Executive Officer, Government Relations at LA County, Metropolitan Transportation Authority, L.A. Metro, and Corey Aldridge, the CEO of San Santa Cruz Metropolitan Transit District. So welcome to all of you. Ms. Kirschbaum, start with you. I'll take the prerogative for San Francisco to go first.

Thank you. Good morning, Chair Wiener and Committee Members. I'm Julie Kirschbaum. I'm the acting Director of the San Francisco Municipal Transportation Agency, which operates Muni. I've been working at the agency for 18 years. I've been the transit Director since 2018 and was recently appointed as the acting Director, which is truly a job of a lifetime.

But I was reminded of some of my early days in your comments earlier because prior to moving to San Francisco in the late 90s, I did live in Boulder Creek and I did benefit from that rural bus on many late nights.

The first point I want to make is that a well functioning transit system is critical to the economic recovery of the entire Bay Area and that even though Muni is a San Francisco based system, it carries over half of all the Bay Area transit riders and it's playing a really important regional role in congestion management and in economic recovery.

Over 60% of all regional transit trips start or end in San Francisco. So that is not only Muni trips, but also BART, Caltrain and our other regional partners. And almost half of all the Bay Area interagency transit trips transfer to or from Muni.

So we are very, very committed to all of the regional coordination and really making the system feel like one system to our customers. San Francisco's chief economist Ted Egan has stated it plainly, if we don't have a solvent transit system, we will have no economic recovery.

Secondly, I want to tell you that I'm really proud of the investments that we've made and how we've improved the quality Muni service. We were forced to become very innovative and nimble during the pandemic and we have really carried that work forward in how we're running the system now.

And I believe that that investment in quality is very replicable to systems throughout the strait the state, both rural and urban. We have invested in 100 miles of transit only lanes to get buses and trains out of traffic. And we have really focused on the basics.

Preventative maintenance campaigns in our subway, for example, have reduced short delays by 70% and long delays by 35%. It used to be a badge of honor for San Franciscans to grumble about Muni, but since the pandemic we have received our highest customer ratings in 20 years. Muni is fast, frequent, reliable, clean and safe.

And all of the investments that we are making are focused in one of those customer oriented areas. The critical support the state provided through The Senate Bill 125 is how we have achieved those results.

I don't think it's an exaggeration to say that we would be operating significantly and even catastrophically less service today if the Legislature and the Governor hadn't put that into place. In September, we hit a ridership milestone.

Our weekday ridership rose to over 500,000 average daily boardings for the first time Since February of 2020 and in October, we had 524,000 average weekday boardings. We do believe that we have as many, if not more riders than we did before COVID but the number of trips is down.

We know that, for example, because while we have many routes that are far exceeding its Covid ridership serving neighborhoods, medical centers, commercial districts, our downtown subway stations are only at about 35 or 40%. So people are still taking transit downtown, but the overall number of downtown trips that they're taking are fewer.

Our overall transit ridership recovery is at about 78% of pre pandemic, but with weekend ridership over 90%. So while we're really proud of this recovery, it is very vulnerable. The fiscal cliff that we and other Bay Area transit agencies have been warning about is arriving very soon in July of 2026.

The state and federal and regional pandemic relief funding that's bridged our budget shortfall will run out for Muni. Right now, it makes up about 16% of our budget.

We have been very cautious with our spending over the last five years, and we have done everything we can to stretch this valuable one time funding, including defunding hundreds of positions at the agency, doing things to cut spending, consolidate functions, and we have frozen most hiring. We've also worked to increase our revenue.

We have raised transit fares and parking fees and fines, and we've hired additional fare inspectors and are seeing really strong fare compliance improvements. We have restored service where ridership is growing, but we've reduced from 91 to 73 total routes. But despite these cost saving measures, we are still facing challenges.

Nearly every funding source that we rely on, tax revenue, parking revenue, and muni fares are below pre pandemic levels. And this is very much because of the lingering economic and social impacts of the pandemic. Downtown San Francisco. Slow economic recovery means less tax revenue, and remote work means less transit fares and parking revenues.

Just to give you an example, our agency operates, owns and operates a large garage at 5th and Mission. It's across the street from the Westfield Mall, which has recently gone bankrupt. That lot used to earn about $25 million in parking revenue a year. This year we're forecasting 9 million.

If you take nothing else away from my testimony today, please remember this number. We have a fiscal cliff of $322 million starting in the summer of 2026. And if we don't solve this problem, the cuts will be absolutely devastating. We are already seeing some of those impacts.

We are looking at about a 50 million shortfall for fiscal year 25-26 and I had the very difficult job early in this role earlier this week of bringing proposals to the SFMTA board for a $15 million summer service cut.

The support that the State provided under SB 125 is essential to allowing us to provide dignified, equitable and affordable transportation across San Francisco and the Bay Area. The work we do on Muni helps drivers, it helps transit riders, and it helps people who get around with active transportation.

Significant near term state funding is needed while we simultaneously work towards a longer term funding solution not just to address the funding needs that Muni faces, but that all of our Bay Area partners face face. Before I wrap up though, I I do want to reframe the conversation slightly.

We've heard today a lot about state dollars described as rescue or relief funding, but I see it a little differently. I see the decision before you all to spend money on public transit as an investment.

When you prioritize funding for transit, you are investing in families who have no other options to get around some of the most vulnerable and marginalized Members of our community. You are investing in California's ability to achieve our climate goals and you are investing in creating the equitable, inclusive society that we all want.

You're also driving our economic recovery. Our budgets are the most powerful expression of our values. What we are asking you today is to invest in the government services that exemplify so many of our core values. Equity, opportunity, economic vitality, affordability and environmental sustainability.

The fact that I get to do all those things in one job is part of why transit is so special. So thank you so much for your attention and consideration for all the comments at the beginning of this conversation, as well as the other panel Members, and I'm happy to answer any questions.

Thank you very much, Ms. Kirschbaum. We'll now go to LA Metro.

Good afternoon, Senator and Members of the Committee. And thank you for the opportunity to speak before the Committee today. And Mr. Chairman, let me express our thanks for reaching out to all areas of the state and bringing us together.

We really appreciate the work you've done to bring everyone together on environmental reforms, funding issues, and that's certainly something we're going to need to do as we go forward. So let me provide the Committee today with an update of how we are using the funds that were made available through the state budget.

I'd first like to highlight how important this funding is to all transit agencies around the state. We're all facing different challenges, different kinds of deficits, and we're all addressing them in our own unique ways, transit agencies, as you've heard, have seen seeing ridership recover to various degrees.

And at Metro we're seeing consistent year over year growth in our ridership. In fact, our ridership has risen consistently since the pandemic and we're about 90% of our 2019 numbers. In fact, on Sundays we've seen our ridership exceed pre pandemic levels. That has largely been due to the support we've received from the federal and state governments.

Louisiana is in the midst of one of the largest expansions of a public transit system in our nation's history. And that's made possible due in part to our 70% approved Measure M. Excuse me, 70 cent voter approved Measure M from 2016. That measure is helping Metro meet the state's climate goals such as those in SB 375.

Our board adopted funding priorities for the funding that came from the state were based on our voter approved sales tax measure, but which were to Fund the East San Fernando Valley Light rail line, the Foothill Gold Line extension and the Southeast Gateway line. I'm pleased to report that the funding provided for the East San Fernando Valley line has helped US to secure $900 million in federal funds and we look to start construction on that project in the near future.

It's important to note this project will replace one of our highest ridership bus lines and it reaches a transit dependent community that does not currently have access to rail. Foothill Extension in the Metro Gold Line has made steady progress and the construction authority is working towards issuing a construction contract for that segment of the project in the near future. Southeast Gateway Line.

A number of cities were just up here earlier this week talking about that project is advancing through the environmental process and it's Metro's highest priority for for federal funding. And I should also note that's another line that serves a community that has a large transit dependent population that does not currently have access to rail.

As I mentioned, all these projects are strategic investments. They reduce greenhouse gas emissions, they reduce congestion. All of these things help to support the state's climate goals. These projects also create thousands of good paying jobs that benefit the entire state.

We're also advancing our zero emission bus program and have recently issued one of the largest bus procurements in the country. As you know, the bus industry is challenged and we have seen a significant reduction in the number of US based manufacturers of vehicles. Our CEO Stephanie Wiggins served on a White House task force.

Can I ask you a quick question on that? Is that a private equity consolidation issue? The the, the reduction in bus manufacturers. I know we've seen in other industries like a fire, fire truck manufacturer, that there is less. It's been consolidated in private equity and it's caused some problems in terms of obtaining that.

I'm not sure I could. Let me look into that and get your response. I'd like to look into it a little bit further. Thank you. Yes, we have about 1000 emission buses in operation right now. Remember, we have to convert our fleets by 2040. Our goal, our bus. Our board has set a goal of 2035.

We have about, like I said, about 100 in operation right now on the G line. But we have a long way to go in converting our fleet to zero emission. And the cost of the vehicles is still high.

The cost of the infrastructure is significant and we're not seeing the kind of range that we need in order to support a one to one replacement for the vehicles. On the Transit Transformation Task Force, you've heard a lot about that already. I would just like to note that Cal STA has been very thoughtful in bringing everyone together.

Obviously these are very difficult discussions. We endeavor to submit the kind of report that Senator Blakespear was mentioning. But I think it's also important to note that transit agencies need to be sustainable as well as being empowered to be able to transform. And then lastly, let me just give you an update on our financial condition.

As with all the agencies in California, we're managing through the challenges we all face. Our fiscal challenges are based on the expansion of our system and the aggressive schedule to convert our fleet ahead of the state's goal, as well as the basic operational challenges that each operator faces.

While we've taken aggressive measures to address the recent year's challenges, we do face deficits in the years ahead. Similar to what you've heard from our partners in San Francisco. We're still five years. We're still talking about our zero emission bus deadline being five years ahead of the state deadline. So we moved it from 2030 to 2035.

But we're still, like I said, aiming to be done before the state's deadline. We're also bearing significant costs related to public safety, cleanliness and improving the condition of our system. We've invested significantly in improving the conditions for our riders and that's been a big reason why we have seen such a growth in our ridership.

But those things are coming from local investments and we need to keep those going. I'd also like to note that we continue to use transit operator funding to support things like homeless outreach and other social services on our system.

And then finally our annual budget process is just beginning and so we are working our way towards adoption of the budget later this year. But but we have identified at this point a surplus, excuse me, a deficit through 2030 of about $2.5 billion, about $2.3 billion to be exact. So that's through 2030.

And I would like to note that's a combination of both a deficit in the capital program and a deficit in our operations about almost evenly split, but that is a combination of capital and operations expense expenditures. So with that I'll conclude unless you have any questions.

Thank you very much, Mr. Aldrich from Santa Cruz.

Thank you Chairman and Members of the Committee for providing me with the opportunity to speak today. I am Cory Aldridge, CEO of Santa Cruz Metropolitan Transit District, here to discuss the vital impact that SB125 funding has had on Santa Cruz Metro and the broader community we serve.

Metro's mission is to provide easy to use convenient transportation for residents while protecting the environment and building better communities. Metro directly operates county wide fixed route and paratransit service with connections to Santa Clara County and Monterey Salinas Transit. Today, Metro operates a fleet of 104 buses, 22 fixed rocks routes and 32 paratransit vehicles.

Santa Cruz Metro has greatly benefited from the SB 125 transit and intercity Rail Capital Program and the Zero Emission Transit Capital Program. The Santa Cruz County Regional Transportation Commission was awarded $34.6 million in SB 125 funds with a substantial $32.33 million allocated to Santa Cruz Metro.

This crucial funding has been instrumental in supporting various transformative projects including our Reimagine Metro Initiative, a system wide service restructuring effort aimed at increasing service, adapting to post Covid travel patterns and creating more efficient and attractive transit network by producing higher frequency service, simplified routes and new express services including 15 minute frequency on key routes with the goal of increasing ridership to 7 million trips annually in the next five years.

The first phase of Reimagine Metro funded through traditional operating sources ran from September 2023 to March 2024. With the SB125 funding, we plan to restore service to pre Covid levels and expand beyond those levels while continuing to use traditional sources for service retention.

After 15 months of public outreach and stakeholder engagement, Metro began implementing the Reimagined Metro Service Restoration and Expansion Plan in September of 2023. Phase one focused on higher frequency routes, particularly connecting disadvantaged communities in Watsonville to job opportun duties in Santa Cruz Phase 2 started in March 2024 and further expanded our.

With $28.3 million in SB 125 funding allocated over three years, reimagined Metro restores and expands transit services, adding a total of 41% more service, creating over 110 new jobs and generating an estimated 1.75 million new passenger trips annually.

To date, these improvements have not only enhanced transit transit access by placing more than 100,000 residents and 40,000 jobs within a 10 minute walk to frequent transit service, but have also resulted in a 22% increase in ridership since the implementation of SB 125 funding began. Moreover, the environmental benefits of this initiative cannot be overstated.

With increased ridership and more efficient transit services, we will see a reduction of 9.8 million personal vehicle miles traveled annually and a decrease in CO2 emissions by 40,000 metric tons per year.

Another key project funded by SB 125, the Santa Cruz Zero Emission Intercity Transit Service Expansion, also known as the Rapid Corridors project, was awarded $4 million to advancing rapid bus enhancements and improving speed and reliability through the implementation of transit Signal Priority infrastructure on high ridership corridors.

This project is ongoing with collaborative efforts between Santa Cruz Metro and the RTC to secure full funding and implementation. Additionally, the TIRSIP Cycle 6 grants approved under the FY21-22 Budget act have further supported our efforts to transition to zero emission vehicles.

With $38.5 million awarded to Metro, we are expanding inner city transit through the procurement of 22 hydrogen fuel cell electric buses and implementing necessary maintenance facility upgrades. This funding also supports the construction of a hydrogen fueling station and a workforce development program to train the next generation of transit workers in zero emission technologies.

However, it is important to acknowledge the challenges that we face in the short term. Vehicle availability due to an aging fleet poses operational difficulties. Additionally, long term funding remains a critical issue. The one time SB 125 funding that Santa Cruz Metro received for the Reimagined Metro project will run out in 2026.

Unless Metro receives additional funding either through SB125 or other funding mechanisms, we will be forced to reduce service and jobs to pre2023 levels. To address this, Metro is exploring a half cent sales tax measure to take to the voters in 2026. If passed, this measure would generate approximately $27 million in funding to support service and operations.

In conclusion, SB125 funding has been pivotal in advancing Santa Cruz Metro's goal of improving service, increasing ridership, promoting workforce development. These initiatives have not only enhanced transit access and reliability but have also contributed to the environmental Sustainability and economic growth. Continued investment in public transportation is essential to building a more equitable and sustainable future for Santa Cruz County.

Thank you very much. Question for Mr. Turner about Metro's housing policy and particularly your joint development policy. I know there's a lot of work happening there. I know San Francisco is now really looking at that as well. We have a Bill SB 79 to try to help facilitate that more broadly, making it easier for transit agencies to build housing and retail on their own land, which will have so many benefits. I'm just curious how it's going.

Sure, I have some statistics I'd like to provide, but just generally the way we pursue our joint development program is by leveraging the properties that we have from the construction of our system. And so we partner with the private sector so that we essentially do land leases and partner with the private sector.

So really what we have to do is sort of leverage what we can out of the private developer through a land lease. But our goal is to create right now 10,000 new housing units by 2031. We've made significant progress in that. About half of those will be income restricted. We are delivering right now 140 housing units.

We have two more projects coming online that consists of 235 housing units in the next couple of months. In addition, we have about 2,600 units that are under construction. And 2,000 of those housing units have been. 2,000 additional units have been approved for new construction. So we're moving along the line to the 10,000.

In January of this year, we began accepting development proposals for the first of 20 new sites that will allow us to reach our goal of building 10,000 housing units. So like I said, about 10,000 housing units by 2031. And we're making significant progress in doing that.

Great. Thank you so much. And for Ms. Kirschbaum, I know there's been some work in San Francisco and I know there's. I think Supervisor Melgar just recently introduced something, so could you comment on the same issue?

Yeah. We were really excited to have the SFMTA board adopt our first joint development program on Tuesday. And Supervisor Melgar is helping to get a Concurrent Resolution of support from the Board of Supervisors. While joint development isn't going to work fast enough to solve our summer 2026 challenges, it's a really valuable tool for long term financial sustainability.

Our portfolio includes over 25 properties that we have the opportunity to partner and bring in the expertise of developers to then help generate ongoing income for the agency. Not only that, but it complements our broader city and state goals of building housing. So we are, we're all in on joint development. We're very excited about it and excited to be working to move projects forward.

Thank you. A question and a comment question is anecdotally I've seen some reports in the last several years regarding public safety, incidents of violence, open drug use on transit vehicles. What experience have you all had with regard to. To that? And if there has been issues, what have you done about it?

Before you start, I want to. Because BART is not part of this. I just want to. Because BART, I think has gotten the most attention for that. I do just want to say, because we worked closely with BART, BART has, is methodically changing all of its fare gates to try to reduce fare evasion.

And as a BART BART rider, I tell you there it's a lot nothing. It's never impossible, but it's a lot harder now than it was before those faregates. BART has also increased not only the deep cleaning frequency of its cars, more personnel in the system, just more people physically there, both armed and unarmed, and also running Shorter trains so that people are less spread out throughout the train. And so and BART has really.

And this is an issue where when you have so Muni and LA Metro I think have the. It's a privilege in transit agencies to have one government that's responsible for you, the City and County of San Francisco or the County of Los Angeles systems like BART, Caltrain is also in this category and others that don't have one city or county responsible for them.

They sometimes have to like basically beg local governments to help them with things like homelessness, some public safety issues. And so BART has struggled with that, but that there's been, I think a lot more work happening. So just speaking for BART on that, I'll now ask our operators here at the table.

Public safety on transit is the most important issue that we are facing right now. While the overall crime statistics on Muni have really improved over time, what we are even more focused on is the perception of safety. How does it feel to ride?

And that focus, I think is part of why we're seeing increases in ridership and increases in our public perception. So we have also doubled down on cleaning and lighting. Those are really key. We have also over time changed the configuration of our buses and trains.

So there's a lot more seating where people are facing each other, kind of creating a social contract and additional safety. We have really focused and BART was also key in this to make Muni a harassment free zone. We really talk about how important it is that all of our customers are safe all of the time.

And we have increased the presence of staff on our vehicles. So whether that's transit ambassadors or fare inspectors, everybody that's on our vehicles has a lot of training on how to De escalate challenging situations. As a city, we are also doubling down on public safety.

This is a huge priority for Mayor Lurie and for all of our city departments because a lot of the challenges that you're hearing about on transit are really larger urban challenges that are spilling over onto transit. And so as we make those investments in public safety, we do also expect the overall experience and perceptions of safety to improve.

And I would say yes to everything the chair said and my colleague from San Francisco said said. We've all seen, especially during the pandemic, the issues that society is facing occurring to a much higher degree on transit systems across the state.

And whether it's homelessness, drug abuse, mental illness, we are seeing all of those things on our systems, and none of us are providers in those areas. We've taken a layered approach and our response is based on safety, reliability, equity. And so we've invested significant resources in completely revamping how we provide security on our system.

We currently have contracts with the Sheriff's Department and LAPD, but we are completely changing that around to be a bottoms up, layered approach to security where we have ambassadors who are there to, you know, they're an extra set of eyes in the system, but if somebody needs help, they're a phone call away to the security services or social services.

We are using, as I mentioned, operations eligible local funding for homeless and mental health and substance abuse services, because we don't. We're not eligible to get that money from the state. So we have to work with our county partners and use our transit funding to provide that.

I have a much longer list of things that I'd like to provide in writing to the Committee afterwards that are things that we have seen help get our ridership back on our system. The other thing I'd like to note is that we're working with all the other agencies in the state on these things.

So we're in constant communication with our partners. In fact, on our security system, we're learning from what BART has done to develop their police. It's a new experience for Metro. So we're going to work with the people who've done it around the country.

And there's a lot of communication amongst transit agencies about how to address these Issues ultimately, like a lot of the things we're talking about cost money. And that's what you're going to hear from the task force a bit. As I mentioned, we're spending local resources on these services.

We'd like to be eligible to get some of the Homeless Assistance Fund that are coming from the state to maybe get some of the substance abuse funding or other kind of funding that that is coming from the state.

Because those things, you know, some of that is, yeah, we need to address that for the safety of our riders. But some of that is these are just people that need help and they're on our system.

Thank you. Just. zero, gentleman from Santa Cruz, probably. And I said I had a statement to make also.

So for us, you know, on our buses we have installed driver barriers which provide a layer of security for our operators. We've also been working on De escalation training which helps with the operator themselves not getting involved. Usually a lot of the attacks we have on operators stem from the operator trying to be the enforcer.

And so we are working on the Deescalation rather than being involved. They can call for a supervisor or for security to come and assist them with that. We're seeing an increase, but we're a smaller community, and fortunately, we've been fairly insulated at this point. But we want to be prepared.

Thank you for that information. I appreciate it. And we'll look for whatever additional information you got for the Committee. The statement has to do with a comment that Ms. Kirschbaum made that we're making an investment and that's true. I'm not sure that systems will ever operate when without some sort of subsidy.

I think in Santa Cruz you're kind of acknowledging that by going for a sales tax increment, we'd all like to see systems totally self sufficient, but I don't know if we get there. But regardless, we are making an investment of public funds for various benefits of public transit, the options for people that don't have options, et cetera.

You well articulated it. I had a conversation earlier with Mr. Tollefson about how we assess the financial success or burden of public transit. And it completely ignores the investment. The investment is the amount of money that we spend to develop these systems and then we spend money to operate them.

And the former is ignored in the assessment of the investment. Now he mentioned there are. Or another gentleman, I think mentioned that there are other considerations in the public sector as opposed to private sector. The benefits of transit which I mentioned. But those can only be compared against the actual public investment in transit systems.

And it really, as an accountant, it amazes me that we completely ignore the money that has to be expended to establish the systems in the first place before you even begin to operate them. Now, I realize that unfortunately my words are going to disappear into the atmosphere because that's the way we account for things in public transit.

But if we truly are going to make an investment for public benefits, then we have to adequately assess what the burden of that investment is and compare that to what we believe are the benefits. Benefits. And we don't do that.

Thank you. I do just want to say before we go to Senator Searto, because just apropos of that, and we want all public services to be done as, you know, efficiently and effectively as possible. And yes, we, public transit, like any public service, will require a subsidy and should receive a subsidy.

And we, you know, it's not, this is not a private business. This is something that supports society, both the people who have no other choice, but also people who do have a choice, but should be given the option to be able to draw travel in a more sustainable way.

I do just want to note that whatever standard folks want to hold transit to, I hope we hold roads and driving to the same standard, because we massively subsidize driving in this state, in this country, absolutely massively.

And when you look at what people pay for gas taxes, for vehicle registration fees, for what we do pay for the privilege of driving, it is not even close to what we pay to build roads, to maintain roads, to build parking, to maintain parking, and so forth. And so driving is massively subsidized in this country.

And that's a topic we can have. People debate tolling of roads all the time. That's a debate we can have. I don't have an issue with subsidizing our transportation system writ large, subsidizing roads, subsidizing public transportation, subsidizing all sorts of ways for people to get around. This is public infrastructure. It's a public good. It's what government does.

And yes, we should make everything efficient. Of course, roads should be efficient, too. But sometimes I feel like, and I'm not criticizing you, I think in General, in this debate, public transportation is held to a standard that roads and driving aren't. Yes, we want transit to be safe. We want people to feel safe on transit.

Let me tell you, if you look at the statistics exponentially, more people die and are injured on our roads. And cars than die or are injured on public transportation. I mean, not even. It's exponential. And so I just, I think it's important to look at that broad picture and not just as we sometimes do.

Transit gets sort of singled out and held to this impossible standard that other forms of transportation are. And so I just wanted to say that. And I appreciate that, Senator Seyarto.

Thank you. I wanted to talk about the ridership because that is the main revenue. Well, it should be the main revenue stream for all of our agencies. We have different levels of ridership. Fare at the fare box. Correct. In other words, we have like student passes, they don't pay anything.

And what percentage in each of these categories where you have ridership that is generated, that pays nothing, Ridership that 's generated, that has just a partial fare and the full fare? Ridership, 10%, 20% for full fare. What are those categories? How much? What percentage of each of those things makes up the full amount of our fares that we collect?

I'd have to get you the specifics of what those percentages on our system. What I'd like to note is that the ridership of LA Metro, when it's true in other parts of the state, are some of the most transit dependent populations in our county. And they are also, they come from some of the lowest economic strata in our society. And so keeping fares affordable has a policy. There's a policy goal behind that.

Because if you talk about increasing fares or increasing the amount that riders pay for the system, you're talking about increasing costs for people who are at the lower end of the economic strata in the state. Earlier there was a discussion about people choosing to drive instead of riding.

That's something that a lot of our riders, that's a choice and a luxury that a lot of our riders don't have. And so they are very transit dependent. We do provide a lot of funding for Low income, reduced fare services. We also provide a student pass program.

And one of the things I'd like to emphasize about the student pass program is that for a relatively small investment, you're developing riders that will become long term transit riders. What's also happening is with, if you can help a student get on transit, that student also has housing challenges. They have their food insecure, their housing insecure.

So if you can solve the transit piece of a student's challenge, that helps them achieve other things in their life. So there's other perspectives.

All I asked was what percentage of the full amount of fares that we collect are in each of those categories. I wasn't attacking that we, you know, give students, you know, free fare. I just want to know how much of the ridership box, the fare boxes, receipts that we are collecting, and how much of it.

Because if we're depending a lot on the full fare people, and that's where most of the ridership is not happening anymore, then we got to figure out how to get the full fare people back in.

And to the chair's point, you know, there is a subsidy that is needed to make a system like this work to help the very people that you're talking about. But what are. What's the number of people that actually are riding on any of the, you know, statewide? What's the ridership figure? I think we should have that somewhere.

Well, I can give you some numbers for hours. For example, in Life, the Life program, which is Low income, that's 20.

We had 20.5 million rides in. I'm not talking about rides. I'm talking about people themselves that actually use the systems. Yeah. Are we, like at a million? Are we at 2 million, 3 million?

I'll have to get you the specific breakdown in the way you're asking, because.

The reason I'm asking that question is because when we're talking about subsidies and the Chair was talking about roads, we have 30 million adults in California, and most of them prefer to drive. And that's why we subsidize roads. It's a choice that people make.

And it's also, people in my district don't have the luxury of having an urban area where they don't have to go that far. They just get on a Metrolink or something like that. When I use Metrolink to go downtown, I have to drive 45 minutes to get to the Metrolink station so I can go downtown, and that's another 40 an hour because of all the stops. For me, it doesn't make sense. I just drive straight there. I'm there in an hour.

So what I'm trying to get at is this comparison that somehow we should be spending as much much on this as we do on roads, which is not. What we're doing, is not really acknowledging that. It's because most of the people in California don't ride on the public transportation. There are some very vulnerable people that do.

And, yes, we need to make sure we take care of them, but that doesn't mean we shouldn't be spending money on roads or subsidizing roads. And given our gas tax collections, I think. What are they? 10.5 billion. That's a Pretty good chunk.

I don't think anyone's. I'm certainly not suggesting that we should, that there has to be some sort of equality between them or that we should disinvest in Rhodes, but it's about adequately investing in both. In my opinion.

All of the above. I'm making the same point, but you're not going to have a 5 billion here and 600 million here where. This is where most of the people are. Yeah, we, we need to help everyone get around.

So yeah, if you can give me those numbers, I'd like to know just for our efficacy, so that we know what we need to really invest from the public side of this to make it work for people that need it the most. Thank you.

Thank you everyone. Thank you for the final panel. Appreciate it. Okay, that's our final panel. We'll now move to public comment. For folks who want to make public comment, you can line up and we ask support a comment. Try to limit it to one minute.

Good afternoon, Chair Wiener and Members. Robert Rayburn, elected Member of the San Francisco Bay Area Rapid Transit District board of directors. BART is thankful for the Senate Bill 125 support that will sustain our operations through early 2026.

BART is delivering on the accountability measures of the Bill while also focusing on increasing revenue, implementing cost savings as we provide clean, safe and reliable transit. Most pre pandemic riders have returned to BART, but they are taking fewer trips. Two data points that address the Chair's distinction between riders and trips.

76% of October 2019 riders have returned as of October 24th. 46% of October 2019 trips have returned as of October. An outdated funding model reliant on fair revenue is left bark facing annual operating deficits of 375 to 400 million beginning in fiscal year 27.

As a rail system with high fixed costs, BART cannot close these deficits through cuts alone. It is imperative that the state seize itself as an investor in world class public transit if we were to meet the needs of our region, the needs of our passengers and ambitious climate goals.

I want to thank Chair Wiener and Senator Araguain for introducing Senate Bill 63 to allow the Bay Area to address its agency's funding needs. Thank you again. BART is happy to be a resource as these conversations proceed.

Chair Wiener and Members, thank you for holding this timely and important hearing. Sebastian Petty here today representing SPUR, the San Francisco Bay Area Planning and Urban Research Association. SPUR believes transit is essential to supporting mobility and affordability across California.

We we applaud the state's sustainable transportation goals and we are extremely grateful to the Legislature for the generous and much needed relief funding you provided to transit in 2023 via SB125. Unfortunately, many of the state's largest transit systems are still facing a financial crisis.

In the Bay Area where our work is focused, BART, Muni, AC Transit, caltrain and others all face the prospect of catastrophic service cuts. Prior to Covid, 82% of Bay Area transit operating needs were covered locally through fares and local taxes.

In 2023, despite the drop in fare revenue, we were still covering 63% of all of our operating costs from these sources. Today, the region is working to authorize new local tax measures to further support transits for our voters to consider in 2026. But we won't succeed in continuing to Fund ourselves without some state help.

Without state gap, funding cuts will hit our biggest systems before we can even make it to the voters. We know the state has many priorities this year, but we are counting on your help. Thank you.

Mr. Chair Members Terry Brennand on behalf of SEIU California, I want to thank you for this hearing and all your efforts on behalf of public transit. I represent the workers in the BART. System, VTA and Santa Cruz Metro all. Over the state in every different capacity.

So I just the only warning here is this is expensive to shore this up. It's far more expensive to rebuild the system if it implodes. And to the Vice Chair's comments about safety and cleanliness, you know BART heard you. Our Members heard you.

They hired a couple hundred of new SEIU Members to deep clean and provide security on these trains. Unfortunately, they'll be the first ones to go if we have to make cuts because they were last hired and I. Think that'd be a travesty and ill advised. Thank you for your time.

Clifton Wilson and on behalf of CalTrain, we just want to thank you, the Chair and Committee, for focusing on the transit operations funding crisis facing our state. Caltrain, which had the highest farebox recovery of any regional rail system in the nation before the pandemic, is facing a 75 million per year deficit beginning in fiscal year 2027.

Though we recently launched a full electrified service from San Francisco to San Jose, the first system in the American west to do so and are seeing great ridership response to that, the pandemic's impacts on changing commute patterns and loss of fare revenue remain huge challenges.

We appreciate our delegation and all the champions in the state Legislature working to help us find a solution and remain committed to as always delivering safe, frequent and reliable transit service in the communities we serve. Thank you for your time.

Hello Mr. Chair and Senators Bryant Miramontes with the American Federation of State County Municipal Employees. We represent about 300,000 workers throughout the state, including in transit agencies in the Bay Area, BART, AC Transit, VTA as well as in Southern California, Long Beach Transit, LAMTA, Northern California, Humboldt and here, and SacRT.

So one of what first I want to say we are appreciative and supportive of the state stepping in, particularly as it relates to maintaining services, expanding services and in many cases we want to stress that importance around funding for restoring services that have already been cut and also any future funding. We would appreciate the priority to be protecting union jobs and restoring services as well. Thank you.

Adina Levin, Executive Director with Seamless Bay Area Thanking Senator Wiener for convening this hearing and the voices of other Members of this body. I wanted to particularly call out Senator Blakespear who looked to the Transit Transformation Task Force to how to grow ridership in order to be able to achieve the state's goals on climate, on housing, on economic mobility.

And some data that came out of that task force have some really good case studies on what is the recipe for growing that ridership.

Vancouver has a high frequency integrated network achieving twice the per capita ridership of the Bay Area and that's because they have high frequency bus, train and ferry service that is frequent and well connected to urban and suburban areas. They have their ridership at pre pandemic levels.

They're having crowding now and they have a similar work from home percentage. This is doable. It's about service, it's about funding service and it's about a convenient, fast and well coordinated system.

We're going to need a layer cake of funding including local self help and including the state support in order to be able to achieve our state's climate and housing equity and economic vitality goals which can all talk about as Californians. Thank you.

I think I'm last finally, good afternoon. Steve Wallauch, I'm here on behalf of. The AC Transit, the Golden Gate Bridge District, Napa Valley Transportation Authority and Foothill Transit. We want to say we appreciate you taking the time to have this hearing today and start looking at this issue.

All of them share similar challenges as your transit panel earlier. Golden Gate is facing like a $230 million deficit of the next five years, AC Transit $150 million over the next four years. So we really look forward to working with you and want to provide any help we can provide. Thank you.

Thank you very much. Is there any additional public comment? Seeing none will close public comment. I want to thank everyone, all the witnesses today. I want to thank my colleagues. I'll especially thank Senators Niello and Seyarto for sticking it out troopers till the very end.

This is a really important issue and it'll be a topic of conversation throughout the year. And thank you, everyone. And with that, we are adjourned.