What to know about Muni’s budget deficit and the efforts to save the transit agency

SAN FRANCISCO (KGO) — Let’s not sugarcoat this. Either Bay Area transit agencies get funding or drastic cuts will be made.

Here’s a scenario not far from the truth presented during a recent rally in support of public transportation.

“Under one of our worst-case scenarios, BART closing at 9 p.m., trains run only once an hour, stations shut down and 1,000 workers lose their jobs,” expressed one of the protesters.

Where and how will the money come from to rescue them?

RELATED: Gov. Newsom approves $750M loan for Bay Area public transit

Let’s start with the state, on Wednesday, Newsom’s office announced that the $750 million loan to subsidize public transportation in five Bay Area counties will move ahead.

That initially helps agencies like Muni with their projected $307 million deficit beginning June 2026.

But not enough to cover all of their expenses.

“And these are going to be hard, big choices,” warned Bree Mawhorter, the San Francisco Municipal Transportation Agency’s Chief Financial Officer, during a budget presentation at City Hall last week.

“How do we solve that the regional measure alone is not enough to close the long-term deficit?” said Bree Mawhorter.

San Francisco Mayor Daniel Lurie has proposed a parcel tax as a way to fill in the gap to help Muni. Voters still have to approve it in November 2026.

RELATED: SF rally held to save Bay Area public transit funding as agencies face huge deficit

Their financial troubles don’t end there. That’s why voters AGAIN will be asked to pass a half-cent sales tax also in November 2026, which is expected to generate one billion dollars a year, split between BART, Muni, AC Transit, Caltrain, SamTrans and other transit agencies.

Why does a transit agency like Muni have a hard time balancing their budget? A few reasons.

As of March 2024, ridership was 76 percent of pre-pandemic levels. That’s lost revenue.

Also, more than 60 percent of Muni’s budget goes toward labor, you know the people who run the transit agency, and every year salaries and benefits go up.

“Those humans are living in an extremely high cost area and we have negotiated cost-of-living increases into our wage contracts so that those humans could live here,” said Mawhorter.

Here’s what the SF Municipal Transportation Agency has done so far to reduce costs and create revenue for Muni.

Over the summer, some routes were cut or altered. Twelve remain suspended from the pandemic. That saved Muni $7 million.

More parking tickets were handed out and revenue from parking generated an additional $18 million.

MORE: SF Muni bus drivers must now get special bathroom breaks approved, with no eating or phones allowed

Five hundred vacant positions will never be filled.

But then you have the loss of revenue because some people are still getting on without paying.

When riding on the subway, it’s harder to avoid paying because of all the fare gates, no so much with buses. This is a problem because Muni relies on the honor system and as we know not everyone pays.

According to their estimates before the pandemic, about 12 percent of people did not pay. But that number went up and as of March 2024, approximately 20 percent of riders got on without paying.

Here’s the issue. Muni has an all-door boarding, which is systemwide, meaning you can get off or enter through any door to avoid the lines and crowding.

But at one point when Muni tried disabling the back doors, service slowed down contributing to delays.

So this year, Muni increased enforcement which according to the agency, has resulted in a 30 percent decline in observed fare evasion.

But Muni maintains the money recovered there represents just a fraction of what they really need and the future doesn’t look all that promising.

“Anything that we cannot fill with revenue by definition has to be filled with cuts,” Mawhorter.