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The SamTrans Board of Directors on Wednesday approved a two-year budget that maintains public transit service across San Mateo County while preparing for a projected operating deficit beginning in fiscal year 2027.
The fiscal year 2026 operating budget totals $323.7 million and is balanced. The following year’s budget is projected at $339.2 million and includes a modest structural deficit, which the agency plans to cover using a one-time surplus from prior years.
“We’re managing today’s transit needs while preparing for tomorrow’s fiscal realities,” said Board Chair Jeff Gee. “This budget supports the workers, families and students who rely on SamTrans every day — and it positions us to meet the financial challenges ahead without compromising our commitment to safe, dependable service.”
SamTrans officials said rising costs are outpacing revenue growth, a trend affecting transit agencies nationwide. According to a SamTrans blog post, the agency’s financial gap is relatively small compared to others in the region and there is still time to implement strategies that could delay or avert the deficit.
To address the anticipated shortfall, SamTrans is considering a mix of cost containment, reserve use, potential service and fare adjustments, and new funding sources. One option under review is a fare increase. SamTrans has not raised fares in nearly a decade and currently has the lowest fare in the Bay Area. Even with a modest increase, officials said the agency would continue to be among the most affordable options. Fare assistance would continue to be available for riders with financial need.
To limit budget impacts, the FY2026 plan includes no new staff positions and reduces spending in non-essential areas such as travel. If additional cuts are needed, SamTrans said it would first consider a temporary hiring pause for administrative roles to preserve core services.
The agency also emphasized that its planned headquarters relocation is not contributing to the structural deficit. According to SamTrans, the current facility is past its useful life, and the move is a one-time capital investment funded through surplus dollars and financing, not ongoing operating revenue.
In addition to the operating budget, the board approved $10.4 million in capital spending focused on safety, state-of-good-repair work and facility upgrades. A separate capital budget amendment is expected in September after adoption of the Capital Improvement Plan in July. It may include funding for zero-emission buses, climate resilience efforts, and upgrades to operator restrooms and bus stops.
According to SamTrans, the agency is also evaluating whether to participate in a potential regional transportation funding measure under SB 63. If included, the measure could help support long-term bus operations.
While officials acknowledged there may be flexibility in the timeline for transitioning to a zero-emission fleet, SamTrans said it has already aligned new bus purchases with the retirement of older diesel vehicles and secured external funding for the transition. Delaying the project would offer limited cost savings, and the agency remains committed to meeting California’s clean fleet requirements.
