Caltrain is facing a substantial operating deficit that could lead to drastic service reductions, according to agency representatives. A regional sales tax measure on the November ballot is seen as crucial to securing future funding for Caltrain and other Bay Area transit agencies.
The Regional Transit Measure, which voters in Santa Clara, San Mateo, Alameda, and Contra Costa counties will consider as a 0.5% sales tax increase, and San Francisco residents will consider as a 1% sales tax, aims to generate up to $1 billion in annual revenue. This funding would benefit agencies such as Caltrain, VTA, BART, and SamTrans.
Caltrain's Chief of Staff Casey Fromson highlighted the agency's popularity, noting that 82% of voters and 91% of riders have a favorable opinion of Caltrain. Fromson also emphasized Caltrain's role in reducing traffic, stating that the service removes the equivalent of three freeway lanes worth of traffic daily.
Despite its popularity and being the fastest-growing transit agency in the U.S., Caltrain's funding model has shifted dramatically since 2019. Before the pandemic, fares accounted for 70% of revenue, but remote and hybrid work patterns have reduced this to 33% today. Caltrain has been actively seeking ways to generate non-fare revenue, including advertising, parking fees, and transit-oriented development along its corridor.
Recent steps to diversify revenue include closing the Stanford station, which required additional staffing and funding due to not being ADA compliant and lacking ticket machines or Clipper card readers. Caltrain also partnered with Waymo, leasing 40 parking spaces, 10 of which are at the California Avenue station. These partnerships are part of the agency's strategy to move away from fare-dependent revenue, Fromson explained.
Caltrain has seen significant ridership recovery following pandemic lows, with an overall increase of 124%, from 643,000 riders to 1,446,000. The electrification of trains has also contributed to more reliable and frequent service, attracting more riders. Ridership in Palo Alto, for instance, nearly doubled between August 2024, prior to the electrification project, and August 2026, according to Caltrain. Councilmember Pat Burt, who serves as vice chair of the Caltrain board of directors, noted that riders on electrified trains exhibit enthusiasm.
Without the regional transit measure, Caltrain faces a $75 million operating deficit that could lead to severe cuts. Fromson warned that services could be reduced, weekend service could be eliminated, more than one-third of all stations could close, and the last trains might run at 9 p.m. instead of midnight. Fromson described this scenario as a "downward spiral" of less service, fewer riders, and reduced revenue, making recovery challenging.
Palo Alto leaders have endorsed the Regional Transit Measure. Councilmember Burt noted that Palo Alto contributes significantly to Caltrain ridership, with roughly twice the number of people boarding compared to Diridon Station in San Jose. He also pointed out that Palo Alto provides free Caltrain passes to low-income workers through the Palo Alto Transportation Management Association, accounting for 75% of all GoPasses in the system. Small business owners in Palo Alto have expressed their reliance on these passes, which provide public transportation options for their employees.
Burt emphasized that all transit agencies, not just Caltrain, need to achieve financial sustainability as state and federal COVID-19 era operating subsidies have ceased. Palo Alto Mayor Vicki Veenker praised Caltrain's efforts to explore non-fare revenue strategies in addition to the ballot measure, stating appreciation for a fresh look at funding approaches.
