Governor’s budget tightening spares Bay Area transit investments

Diridon Station
Courtesy VTA

Gov. Gavin Newsom’s newly proposed state budget for the 2024-25 fiscal year largely preserves funding commitments for public transit in California metro areas, though it would delay for one year $1 billion in investments through the state Transit and Intercity Rail Capital program. 

This would include a delay in the Bay Area’s receipt of some $200 million to advance BART’s Transbay Core Capacity project and the Santa Clara Valley Transportation Authority (VTA)’s project to extend BART from Berryessa/North San Jose station through downtown San Jose to Santa Clara. Fortunately, based on the cash flow needs for the projects, this funding deferral should not affect the projects’ schedules. 

“We appreciate the Governor's continued support for transit and for future funding for BART Silicon Valley Phase II as we move forward with this project,” said Santa Clara County Supervisor and MTC Commissioner Cindy Chavez, who also serves as chair of the VTA Board of Directors.

MTC Chair and Napa County Supervisor Alfredo Pedroza made a similar point.

“I think the governor deserves credit for playing a bad hand well. He’s trying to close a $38 billion budget gap, so there are a lot of hard choices that will have to be made across virtually every category of state spending," he said. "The governor and the Legislature last year made a big commitment to support transit that included funds to sustain the service that riders depend upon every day in the Bay Area and across the state. We’re grateful this new budget proposal honors that commitment.”

In addition to the delay in funding for rail capital projects across the state, the governor’s new budget proposal includes cuts and delays to state funding for bicycle and pedestrian projects as well as for freight movement programs, including some funds previously earmarked for the Port of Oakland.

State support for housing would be squeezed harder by the proposed budget belt-tightening. The governor’s initial plan would cut the Multifamily Housing Program —which provides low-interest loans for the construction, rehabilitation and preservation of affordable apartments — by more than 75%; slash the Infill Infrastructure Grants Program from $225 million to just $25 million; and defer $830 million in other housing-related spending to fiscal 2025-26. The proposal also calls for the state General Fund to “claw back” half of the $600 million approved for Regional Early Action Planning (REAP 2.0) grants statewide. 

The Bay Area’s $100 million plan for REAP 2.0 money includes funds for housing preservation, Priority Sites, and eligible investments such as transit-fare integration and the Regional Mapping and Wayfinding initiative that are part of the Bay Area Transit Transformation Action Plan.

The governor’s budget proposal is just the first step on the months-long road to a new state spending plan. Budget subcommittee hearings will begin in the weeks to come, and revisions to the proposed budget are due in May, with the Legislature making final decisions after that. The state Legislature must pass the final 2024-25 state budget and send it to the governor by June 15 for his action by July 1.

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