The Peninsula Corridor Joint Powers Board (Caltrain) met for a budget workshop, during which 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 citizens’ initiative to bring the measure to the ballot, said Caltrain officials. 

Absent a new, reliable funding source, Caltrain said it will be forced to make significant service and staffing cuts, with potentially long‑lasting consequences for the tens of thousands of people and businesses that “depend on — and have begun to benefit from — the newly electrified system.”

The agency added that, 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.

Potential Cuts Facing Caltrain, Riders

The potential cuts that were presented to the Caltrain board as part of a no external funding scenario included:

1. Closing more than one-third of stations.
2. Eliminating all weekend service.
3. Reducing train frequency to once an hour.
4. Ending service by 9 p.m.
5. Cutting segments of services.

 “Caltrain is delivering more frequent, faster, and more reliable service for riders up and down the Peninsula," said Caltrain Executive Director Michelle Bouchard. “But, we are facing a structural funding challenge that cannot be solved through cuts or efficiencies alone. Without a stable, long-term funding solution, we will be forced to make difficult decisions that would significantly reduce service and impact the communities that rely on Caltrain every day.”

Caltrain’s Impact in the Region

Caltrain officials said ridership is up 47% in 2025 compared with the previous year, making it the fastest-growing transit agency in the US.

With the launch of the agency’s new high-performance electric trains in September 2024, agency officials said Caltrain has generated strong support for the agency. 

In fact, a poll of voters in Santa Clara, San Mateo, and San Francisco counties found overwhelming approval for Caltrain: 82% of respondents reported a favorable view of the transit agency, rising to 91% among frequent riders. 

Despite this progress, Caltrain is currently projecting an average annual deficit of approximately $75 million from FY2027 to FY2041, largely due to the rise of remote work and changing travel patterns. Officials also said Caltrain has high fixed costs for maintaining its new electric infrastructure and state-of-the-art fleet, which are required “whether the agency runs a single train daily or the usual 104.”

To help address budgetary issues, Caltrain has instituted cost-cutting measures where possible and expanded new revenue sources to reduce its annual operating deficit. The agency has also taken significant cost-cutting measures, including FTE freezes, crewing efficiencies, and reductions to professional services and other non-labor expenses.

Caltrain is also working hard to help fund a portion of operating costs through revenue from sources other than fares, including advertising and naming rights, monetizing Caltrain’s real estate, and other assets like fiber-optic cable capacity. 

Last May, the Caltrain board 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.

Officials said 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.