The San Diego Metropolitan Transit System’s (MTS) board unanimously approved a $473.1 million operating budget for Fiscal Year 2026. 

The budget maintains current service levels across all Trolley light rail lines and 92 bus routes while initiating a long-range strategy to address future fiscal challenges.

The approved budget ensures that the 15-minute Trolley service frequencies introduced in January 2025 will remain intact, delivering consistent, high-frequency rail service across the region.

Balanced for FY 2026, but Long-Term Challenges Remain

MTS has balanced its FY 2026 budget with projected revenues and expenses at $473.1 million. 

The balanced framework relies on short-term fiscal strategies, including using prior years’ stimulus reserves and capital fund reallocations, to maintain operations while addressing an anticipated structural deficit exceeding $120 million by FY 2029.

Key financial highlights:

• $62 million in reserve funds from previously drawn federal stimulus allocations are being used to support operations.

• $25 million in non-critical capital funds have been reallocated to maintain service levels in FY 2026, with further reallocations likely in FY 2027 and FY 2028.

Comprehensive Operational Analysis Underway

To help shape a more sustainable and efficient transit network, the MTS board also approved a contract with Transportation Management & Design Inc. (TMD) to conduct a Comprehensive Operational Analysis (COA) — a full-scale review of bus and rail services. The study will take place over the next 18 months and evaluate two planning scenarios:

• Service expansion if new funding sources materialize.

• Service reductions if current revenue levels persist or decline.

The COA will assess ridership trends, route performance, and regional mobility needs, offering recommendations for route redesigns, frequency adjustments, and system-level changes to enhance operational efficiency.

Capital Program Supports Long-Term Modernization

In parallel with the operating budget, MTS has committed to a $163.3 million Capital Improvement Program (CIP) for FY 2026. The capital plan includes funding for 40 projects, focusing on:

• State of good repair for bus and rail fleets.

• Transit station and stop upgrades.

• Facility modernization and safety enhancements.

The dual investment approach — sustaining near-term service while modernizing system infrastructure — is a critical pillar of MTS’s strategy to remain responsive to current riders while preparing for long-term transit demand.