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SFMTA outlines structural shortfall and menu of funding packages as board begins budget work
Summary
SFMTA and the City Controller presented a multi-year fiscal forecast showing a growing gap between revenues and expenditures and the agency's staff offered six funding-and-cut packages that mix ballot measures, parking and administrative changes, and limited service reductions for the board's consideration.
The San Francisco Municipal Transportation Agency, the City Controller's Office and SFMTA finance staff told the agency's board at a special budget workshop that Muni faces a structural deficit that will require a mix of new revenue, internal savings and policy changes to close.
City Controller Greg Wagner told the board the city's five-year forecast shows revenues growing more slowly than costs and warned the trends that have depressed general-fund growth are continuing. "We are gonna alter that trajectory. We're legally required to balance the budget," Wagner said, summarizing the document his office produced with the Mayor's Budget Office and the Board of Supervisors.
That citywide picture feeds directly into the SFMTA forecast because general-fund revenue shares are a major funding source for transit, Wagner and Ted Egan, the controller's chief economist, told the board. Egan said national economic risks ' including recent tariff-related shifts in economic sentiment ' have raised downside risk to the Bay Area outlook even as downtown recovery has shown some momentum.
SFMTA Chief Financial Officer Bree Mahorter gave a line-by-line look at agency finances and the immediate gap staff have modeled. She said the agency's current planning numbers show roughly $320 million in additional budget pressure in the 2026-27 cycle and about $350 million in the following year, and that the agency's longer-run projection grows thereafter if no new, ongoing revenue is found. Mahorter urged the board to treat the workshop as the start of a months-long process: staff want direction on the high-level building blocks by early to mid summer and time to return with implementation plans in the fall.
"There is no single solution," SFMTA senior staff told the board while presenting the packages. Staff and the Controller's Office organized options developed by the Muni Funding Working Group into six packages that combine different levels of (a) local and regional ballot revenue, (b) non-ballot parking and fee adjustments, (c) internal efficiencies or administrative changes, (d) subsidy reductions and (e) service reductions. Package A, the most revenue-focused option, relies on a larger regional/local ballot contribution and limited non-ballot changes; packages toward the other end of the set shift more of the balance toward service cuts and administrative savings.
Staff repeatedly emphasized timing constraints: many one-time federal and state relief sources that helped the agency in recent years are expiring, and any ballot revenue collected in a November election would not begin flowing to the agency until the following spring. That timing gap is one important reason staff presented mixes of short-term bridging options and ongoing sources.
Why this matters: SFMTA provides the transit infrastructure the city uses to concentrate jobs and travel downtown; the Controller's office told the board that, before the pandemic, 44 percent of San Francisco workers used transit citywide and those downtown numbers are even higher. Agency leaders and city economists warned that continuing to defer structural revenue choices risks deeper trade-offs later.
What the board asked staff to do next: directors asked staff to continue developing the four kinds of work the board will need to weigh ' detailed implementation plans for any revenue or efficiency choices; more precise estimates on non-ballot revenue options (for example, expanded paid parking and residential permit changes); a clear schedule and polling plan for any local or regional ballot measures; and a public-facing explanation of what different packages would mean for service, fares and subsidies.
The agency presented the board with a timeline that would let the board signal policy building blocks by mid-summer, return implementation plans in the fall, and move technical budget language toward the Mayor's May/June submissions. Staff emphasized the board needed to pick how hard to pursue each lever so finance and operations could prepare implementation steps that would be ready if the board chooses that direction.
Ending: The meeting did not include any formal votes. Staff and the Controller's Office will produce a public report summarizing the working-group packages and return with updated budget scenarios and implementation options as the board narrows its preferred approach.
