VTA’s financial runway

Transit agencies in the Bay Area and around California are facing budget crises as federal relief funding runs low while ridership and revenues are slower to recover.   Different agencies are in different conditions, with SFMTA, BART, Caltrain and AC Transit expecting to reach a fiscal cliff by 2025. 

VTA has a longer fiscal runway, according to information in response to requests from Eugene Bradley of Silicon Valley Transit Users.  

Unlike BART and Caltrain with budgets that depended heavily on fares before the pandemic, VTA’s farebox recovery rate was 10% or less before the pandemic.  And unlike SFMTA with revenues dependent on the San Francisco city budget and car parking, which have been severely impacted by the pandemic – VTA’s revenue depends heavily on sales tax which has been strong. 

VTA reported through the board secretary that the agency has not been drawing down its federal relief funds yet. 

“From a VTA Transit Operating perspective, our current average monthly expenditures (“burn rate”) through January of fiscal year 2023 are approximately $42.8 million per month.  VTA’s current fare revenue, sales tax receipts and other income are covering this monthly spend, and VTA anticipates this to continue through the end of fiscal year 2023.  As a result, VTA does not anticipate using any federal dollars in fiscal year 2023.  Additionally, all efforts are being made to ensure a balanced budget is adopted for VTA’s next biennial budget cycle (fiscal years 2024 and 2025); therefore, not utilizing any federal dollars for deficit mitigation.”

VTA does expect deficits starting in 2026, and will be able to use the federal relief funds at that time.  According to staff’s response to Eugene Bradley’s request, “Current projections (based on the fiscal year 2022-2023 biennial budget) reflect deficits in fiscal year 2026 and beyond.  Based on the balanced budget described above for fiscal years 2024 and 2025, VTA projects the federal relief dollars could be used to mitigate future deficits through fiscal year 2031 should those deficits materialize.”

Given its goals, VTA has distinct financial needs and challenges.  In its Visionary Network planning, VTA has identified that it provides much less service than peer agencies and is developing a goal to substantially increase service.  And VTA is looking to complete its funding plan for the $9+ billion project to extend BART to Silicon Valley. 

As the region starts to consider regional transit funding in the coming months, the planning will need take into account the different needs around the region.

VTA bus