Report Details Shortlisted Options of Next Steps to Help Close the SFMTA's $322 Million Budget Deficit

SAN FRANCISCO — Today, the Controller’s Office released a report that identifies a list of practical options to help the San Francisco Municipal Transportation Agency (SFMTA) address its significant budget deficit and avoid future service cuts. Despite the highest rider satisfaction in over 20 years and perceptions of SFMTA service increasing steadily since the pandemic, declining parking revenue and ridership (due to remote work), the exhaustion of one-time federal and state grants, and the slower growth of General Fund support have contributed to the SFMTA’s growing fiscal troubles.

The latest projections show that SFMTA’s budget deficit is expected to rise to approximately $322 million by July 2026. In order to balance the budget and prevent harder decisions down the road — including service cuts that would cause devastating impact — the SFMTA and policymakers will need to press ahead with selecting options from this report to ensure the continued operation of public transit in San Francisco and, by extension, the City’s continued economic recovery. Actions taken from this report will be in addition to SFMTA’s ongoing efforts to close the budget gap.

In fall 2024, the SFMTA partnered with the Controller’s Office to establish the Muni Funding Working Group (which included labor representatives, business groups, City officials, and external advocacy organizations) to identify a combination of new revenue sources and administrative reductions to close the budget gap. The Working Group’s report details a shortlist of the 37 most feasible options, organized into six packages. Each of the six packages include different combinations of service cuts, funding options, and efficiencies to reach $322 million and, importantly, include ideas that provide ongoing revenue vs. one-time solutions.

Of the options presented, service cuts represent a worst-case scenario for both Muni riders and the City as a whole. Members of the Muni Funding Working Group were clear about their objections to major service cuts. In contrast, revenue generating options, including regional or local ballot measures, stand to be the most important and least painful tools.

“A safe and strong transportation system is critical to our city’s recovery,” said Mayor Daniel Lurie. “As we make the tough decisions necessary to stabilize Muni’s finances now, this group of experts is helping to map out the path forward to ensure the system can continue to serve San Franciscans in the long term. We will continue to work with SFMTA to deliver reliable Muni service across our entire city.”

“I hope this report conveys that San Francisco is approaching a critical decision point — either we choose new sources of funding, or Muni will need to make significant service reductions that affect our residents,” said Controller Greg Wagner. “San Francisco’s economic recovery is gaining momentum, but we know that downtown and our neighborhoods need continued reliable Muni service to thrive. Now it will be up to policy makers and the voters to determine what happens next.”

“San Francisco’s future depends on reliable, accessible public transit, and this report shows what’s possible when advocates, labor and business leaders, and policymakers come together with urgency and purpose,” said Julie Kirschbaum, SFMTA Director of Transportation. “These real solutions reflect our shared commitment to preserving the Muni service San Franciscans rely on every day.”

“We are strongly supportive of a robust SFMTA, as this service is essential for our workers and our customers,” said Laurie Thomas, Executive Director for the Golden Gate Restaurant Association. “The Controller’s and SFTMA’s approach of bringing together a diverse group of stakeholders to have important conversations was critical for hearing different points of view from across the city landscape. We appreciate the ability to participate and look forward to helping get to a solution.”

“Through months of tough and honest dialogue with invested stakeholders, the Muni Funding Working Group developed a set of solutions that included reducing staff and service cuts to provide the best outcome for the riders and the city of San Francisco,” said Terrence Hall, SFMTA employee and Muni Funding Working Group member. “We have to continue to work together to provide the best outcome for Muni riders and the City and County of San Francisco.”

On April 22, 2025, the SFMTA presented options to the SFMTA Board of Directors for consideration for the FY27 budget process. Beginning in summer 2025, the SFMTA staff will develop detailed implementation plans that will provide further certainty on the timing and amount of any expected revenues or savings. The SFMTA Board of Directors, the Board of Supervisors, and the Mayor will make final decisions on which packages or combination of package components as part of the normal FY27 budget process starting in fall 2025.

Today’s report will provide a foundation for future decision-making by the SFMTA Board of Directors, the Mayor and Board of Supervisors, and ultimately the voters, should ballot measures proceed in future municipal elections. Any ballot measures asking San Franciscan’s to vote for or against funding Muni would appear no earlier than calendar year 2026.

“We are grateful to have been a part of the SFMTA’s Muni Funding Working Group. San Francisco’s recovery depends on thriving transit system connecting all our residents, workers, visitors, and opportunities. We will continue working to ensure new revenue solutions are equitable, predictable, and sustainable for the diverse sectors powering our economy,” said Rodney Fong, President and CEO of the San Francisco Chamber of Commerce.