Beginning June 16, 2025, Tamien Station Electric Train Service Temporarily Suspended. Info: caltrain.com/status
A $75 million per year deficit looms as ridership continues to boom
Caltrain’s Board of Directors approved its operating and capital budgets for Fiscal Year (FY) 2026 at the rail agency’s monthly board meeting.
The FY2026 operating budget is nearly $260 million, with funds coming from fares, Measure RR, state SB 125 funding and utilization of State Transit Assistance (STA) carryforward funds. Caltrain identified $10.9 million in operating cost reductions compared to its earlier financial projections by reducing both labor and non-labor expenses. These reductions were achieved while maintaining current service levels and reflect Caltrain’s commitment to cost control and financial stewardship.
The balanced FY2026 operating budget will continue to fund Caltrain’s popular electric service, running trains every 15 minutes at most stations during peak hours and half hourly service at all other times including on the weekend. The agency continues to break post-quarantine ridership records. April’s ridership saw a 60% increase over the same month the previous year, and weekend ridership is currently higher than it has been in the 161-year history of the rail corridor.
Caltrain’s FY2026 $34.8 million capital budget will be funded through a combination of federal, regional and state grants, local funding and member agency funding.
Caltrain’s capital budget focuses on state of good repair and safety and includes funding for grade crossing safety improvements. At the Broadway Burlingame crossing, three vehicles a week were turning down the tracks. After the installation of new AI technology, solar markers, delineator posts and other cost-effective solutions, there have been zero incidents at the crossing. Similar safety investments are planned throughout the corridor.
Caltrain is projecting an average annual deficit of close to $75 million between FY2027 and FY2035. Without an injection of funding from a regional sales tax measure or other external sources, Caltrain will need to explore drastic service reductions, station closures and administrative cost reductions. This operational funding shortfall could be exacerbated by proposed cuts in the Governor’s May Revise budget, which would further reduce Caltrain’s operating funding through SB 125 in FY2026 by $10.4 million.
The agency is reducing internal costs and exploring new revenue strategies to address the funding deficit, as well as working closely with regional and state partners to secure external funding. Caltrain’s base ticket fare will increase by 25 cents on July 1, in accordance with the Board-approved fare policy. Caltrain is also working hard to increase ridership, and revenues along with it, by increasing marketing and promotion around special events, redesigning the GoPass Program, and partnering with local cities to pursue land use and development policies that encourage transit use.
Additionally, Caltrain is pursuing opportunities outside of fares to generate revenue. The agency is also exploring charter trains for special events, advertising and naming rights prospects, solar and energy storage and leasing fiber optic conduits.
FY2026 begins on July 1, 2025 and ends on June 30, 2026.
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About Caltrain: Owned and operated by the Peninsula Corridor Joint Powers Board, Caltrain provides rail service from San Francisco to San Jose, with commute service to Gilroy. Serving the region since 1863, Caltrain is the oldest continually operating rail system west of the Mississippi and the first railroad to convert from diesel to electric power in a generation.
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Media Contact: Dan Lieberman, 650.622.2492