Caltrain outlines potential service cuts absent new funding source

The Peninsula Corridor Joint Powers Board of Directors (Caltrain) staff outlined the significant service reductions Caltrain could be forced to make without new external funding. 

Senate Bill 63 authorized the formation of a new, five-county Public Transit Revenue Measure District that allows the board of that District or citizens using the initiative process to place a revenue measure on the November 2026 ballot. A group of citizens has already begun gathering signatures for a citizen’s initiative to bring the measure to the ballot. 

Absent a new, reliable funding source—through a regional measure or other external support—Caltrain will be forced to make significant service and staffing cuts. Daily, Caltrain carries the equivalent of three lanes of Highway 101 traffic and reduced service would result in more traffic and more pollution—36,000 additional daily car trips, adding 828,000 miles of driving and generating 220 additional metric tons of CO₂ each day. Caltrain also contributes to the local tax bases and provides major benefits in terms of economic development along its corridor. Cuts would weaken access to major job centers and station areas that anchor transit‑oriented development and business decisions. 

The potential cuts that were presented to the Caltrain Board as part of a no external funding scenario included:
Closing more than one-third of stations;
Eliminating all weekend service;
Reducing train frequency to once an hour;
Ending service by 9 p.m.; and
Cutting segments of services

Caltrain ridership continues to rise—up 47% in 2025 compared with the previous year, making Caltrain the fastest growing transit agency in the United States. The launch of new high-performance electric trains in September 2024, offering a better experience for Caltrain riders and providing faster and more frequent service, has generated strong support for the agency. 

A poll of voters in Santa Clara, San Mateo, and San Francisco counties highlighted their overwhelming approval for Caltrain, with 82% of respondents reporting a favorable view of the transit agency, increasing to 91% among frequent riders. 

Despite this progress, long-standing challenges to transit agencies throughout the Bay Area continue to persist. Caltrain is projecting an average annual deficit of approximately $75 million from FY2027 to FY2041. This is due in large part to the rise of remote work and changing travel patterns. Caltrain also has high fixed costs with maintaining its new electric infrastructure and state-of-the-art fleet that are required whether the agency runs a single train daily or the usual 104. 

Caltrain has responded by instituting cost-cutting measures where it can and expanding new revenue sources to reduce its annual operating deficit. The agency has taken significant cost-cutting measures, including FTE freezes, crewing efficiencies, and reductions to professional services and other non-labor expenses. The agency is also working hard to help fund a portion of operating costs through revenue from sources other than fares, including from advertising and naming rights, monetizing real estate, as well as other assets like fiber optic cable capacity and more. 

These non-fare revenue strategies and cost-cutting efforts are showing some results and will remain critical initiatives but they cannot solve the structural deficit alone. Caltrain needs a new, stable funding source to avoid cuts that would impact service, decrease ridership, and leave the agency with a continuing structural budget deficit. 

Last May, the Caltrain Board of Directors voted to support SB 63, which authorized a proposed 14-year regional tax measure to fund public transit in the Bay Area and would allocate approximately 7% of its funds to Caltrain—by creating a half-cent sales tax in four counties and a one cent sales tax in San Francisco, with built-in measures to ensure effective oversight and accountability. 

If the measure qualifies for the ballot and a majority of voters support the measure, it is projected to fully fund Caltrain’s operating deficit for the 14-year duration of the measure. The Caltrain Board will continue refining the FY2027 budget options in the coming months, alongside long-term service and financial planning efforts to address the agency’s projected fiscal cliff should external funding not become available. 

Source: Caltrain