SFMTA warns of $320 million gap; working group recommends mixed package of cuts, efficiencies and ballot options

SFMTA Director Julie Kirschbaum told the San Francisco County Transportation Authority board on May 13 that the Municipal Transportation Agency faces a projected $320 million funding gap in fiscal year 2026–27 and that the agency is pursuing a mix of internal efficiencies, service changes and potential local and regional ballot revenue measures to address it.

Why it matters: The SFMTA operating budget covers transit, parking and street operations that shape daily mobility in San Francisco. A sustained funding shortfall of this magnitude would likely require a blend of service reductions and new revenue and could affect Muni service levels, capital delivery and ongoing transit recovery.

Key points from the presentation: - Shortfall: Director Kirschbaum said the agency’s current projected deficit for FY 2026–27 is about $320 million, driven in part by the exhaustion of one-time federal, state and regional support. “About 17% of our budget is coming from one-time sources that will be exhausted by the summer of 2026,” she told the board. - Staffing and savings already taken: SFMTA has identified roughly $90 million in personnel reductions to date (ongoing containment that grows to roughly $100 million by FY 2026–27), but further savings are constrained because 60% of the operating budget is labor and other mandatory costs are difficult to reduce. - Revenue measures and timing: The agency would likely need both a regional measure and a complementary local measure. Kirschbaum and staff stressed timing limits: a measure placed on a November 2026 ballot would not start generating substantial revenue until spring 2027, leaving a near-term funding cliff. - Revolving credit and borrowing: SFCTA and SFMTA plan to draw about $110 million from their revolving credit agreement in FY25–26 to bridge cash needs; the authority previously drew $65 million and has $10 million undrawn capacity remaining under the existing credit line. - Working-group packages: A city-led muni funding working group developed six packages (A–F) combining internal efficiencies, non-muni cuts, parking optimization, modest and large ballot measures and, as a last resort, service reductions. The group broadly preferred package A, which emphasizes ballot revenue paired with internal efficiencies. - Fare policy and operations: Kirschbaum emphasized that fare revenue alone cannot close the gap. The SFMTA is deploying Clipper 2 / open payments to improve fare collection and plans fare-compliance efforts to increase payment rates. She said some ridership changes (more people paying by phone rather than tagging) complicate compliance measurements but that Clipper 2 should help.

Quotes: "About 17% of our budget is coming from one-time sources that will be exhausted by the summer of 2026," Director Julie Kirschbaum said, summarizing the agency’s exposure to expiring federal and regional relief funding.

"It's just gonna take a lot of different solutions all working together," she added when describing the need for multiple revenue and savings levers.

Board and public reaction: Commissioners and callers expressed concern about further service cuts and urged maximizing non-regressive revenue sources, protecting transit service, and expediting fare-collection improvements. Public commenters and transit advocates urged exploration of fare products, congestion pricing, and non-fare revenue to preserve Muni’s network.

Next steps: SFMTA will continue to refine package options, coordinate with regional partners on potential ballot measures (including SB 63-related discussions), and seek an additional tranche of short-term bridge funding while pursuing longer-term ballot or legislative revenue solutions.