Governor signs SB63, paving way for transit funding regional measure and signature gathering campaign
On Monday, October 13 Governor Newsom signed SB63, the authorizing legislation for a Bay Area regional transit funding measure.
Passing this measure is essential for Bay Area transit transit. If approved by voters at the November 2026 ballot, this measure will prevent deep service cuts to BART, Caltrain, Muni, AC Transit, and other transit services. A small but important portion of the measure will go towards funding regional integration of our transit network and about one-third of funds will be flexible for counties to spend on other transit-related priorities.
Now, the work begins to kick off a massive signature gathering effort starting in January to get this measure on the November 2026 ballot and then the work of getting voter approval.
What's in the Ballot Measure?
The bill enables a 14-year sales tax measure to be placed on the ballot in Alameda, Contra Costa, San Francisco, San Mateo, and Santa Clara counties. The measure would be a half-cent sales tax outside of San Francisco, and up to a full percent in San Francisco. Early estimates from MTC found that the measure could generate roughly $1 billion annually.
More than 60% of revenue will go towards preventing service cuts on BART, Muni, Caltrain, AC Transit, and small East Bay operators.
Roughly 33% of revenues will be “return-to-source” – funding allocated to county transportation entities that can be spent at the county’s discretion on public transit expenses, including operations funding, capital projects, and/or road repaving projects on roads served by fixed-route transit.
Finally, $46.4 million (4.4%) of funds are set aside for regional transit integration efforts. This includes fare integration and affordability (i.e. inter-agency free and reduced priced transfers), transit priority projects to deliver faster and more reliable service, funding to roll out regionally integrated transit maps and signs, and coordinating paratransit and other accessible transportation services.
As mentioned earlier, the bill allows for the measure to be placed on the ballot via a citizens initiative. This is critical as it reduces the voter threshold to 50% plus one, a significantly more viable option when compared to the typical two-thirds majority needed for tax measures placed on the ballot by government entities.
Financial Efficiency and Accountability Framework
The measure also includes extensive financial review mechanisms of transit agencies to ensure funds are being spent in a cost-effective manner.
A new Oversight Committee will be created to ensure transit operators comply with cost-saving, revenue-generating, and ridership-increasing strategies throughout the duration of the funding measure. The Committee will be composed of the chair of MTC (if the chair is from one of the 5 counties) or another members of MTC from the 5 counties, the board chair or president (or a board member designee) of subject operators, 4 independent experts appointed by MTC with expertise in public transit operations and finance, and a representative from CalSTA and Department of Finance as nonvoting members.
In Phase 1 of the oversight process, MTC will hire a third-party consultant to review the cost-saving measures implemented by agencies since January 2020, identify future strategies to increase and improve service and the rider experience with existing resources, and analyze transit operators’ property assets to identify potential land use development opportunities that will support ridership growth and generate long-term value. This analysis must be completed before April 2026.
The Oversight Committee must then review this analysis and approve it. By July 2026, each operator must then adopt formal policies or budget actions that outline specific strategies they commit to implementing.
Then for Phase 2, within 480 days of the regional measure passing, a consultant must identify measurable cost-saving strategies for operators and a conduct a "comprehensive regional assessment for development and financing strategies” that includes:
Strategies to leverage assets through housing, commercial, mixed-use, and other transit-supportive development
Analyze potential impacts on ridership, revenue generation, fiscal stability, and broader public benefits, including affordable housing, job creation, and system wide fiscal sustainability
Consider governance structures and financing mechanisms, including opportunities for regional partnerships, and alignment with existing public and private financing tools
Produce a regional development and financing strategy to be formally considered and acted upon by the Oversight Committee.
The Oversight Committee must then review the Phase Two results and specify to each operator what needs to be included in their implementation plan. Each operator will submit an implementation plan, which the Committee can approve or modify, with the operator being able to reject the proposed changes if it has an unacceptable impact on transit service, safety, or is inconsistent with other documented local policies or procedures.
Regional measure funding would be conditioned upon the Committee determining a transit agency's ongoing compliance with the implementation plan. If an operator does not comply, MTC can reallocate the withheld funds to support public transit expenses within the county or counties that the operator serves.
In addition to the Oversight Committee, two years after the passage of the measure, four Ad Hoc Adjudication Committees (one for AC Transit, BART, Caltrain, and Muni) would be set up to receive concerns about transit operator's service and performance. More details on the Committees can be found here.
Next Steps
Beginning in January and running through May of 2026, a signature gathering campaign will get underway across the 5-counties to qualify the ballot measure for the November 3, 2026 General Election. Over 186,000 signatures – 5% of the over 3.7 million residents of all five counties – will be needed to qualify for the ballot. The number of signatures gathered will need to be significantly larger than the threshold to account for invalid signatures and duplicates. Signatures can be collected in aggregate across the five counties. In other words, each county will not need to meet the 5% threshold in order to qualify for the November General Election.
The deadline to qualify for the ballot is June 3rd, 2025 and the campaign to get the measure passed at the ballot box will run through November.
A campaign of both paid and volunteer signature gatherers will be required for the ballot measure to get on the ballot. Seamless Bay Area is working in partnership with organizations across the 5-counties to help people understand what’s at stake and connect people with opportunities to volunteer.
Conclusion
SB 63 is the final product of two years of negotiations and mobilization from advocates, organizers, legislators, and transit supporters.
Rider organizing and advocacy played a key role in supporting the decisions of San Mateo and Santa Clara Counties to join the measure, making it much more effective in supporting the multi-county regional services Caltrain and BART, and supporting the regional programs for integrated fares and accessible transportation.
Getting to this moment would have not been possible without effort from thousands of transit supporters who took action over the last two years, and several years of advocacy from the Voice for Public Transportation Coalition.
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