The final report is out, but many policy and funding recommendations fall short of actionable steps to solve the most pressing issues facing transit today. Here’s how the Association is responding.
By Arianna Smith
Managing Editor
Transit California
The Transit Transformation Task Force (Task Force), established in 2023 as part of a landmark California state budget deal through SB 125, made a major promise: it would provide a pathway out of the seemingly-intractable funding and policy obstacle course and offer a new, realizable vision for the future of California transit.
The Task Force, convened by the California State Transportation Agency (CalSTA), counted twelve Association member agency representatives amongst its ranks. The Task Force met for nearly two full years to establish priorities and discuss concerns, all with the ultimate goal of producing a report that reflected the scope of transit’s problems, and, most importantly, provide recommendations that the Legislature, the Governor’s Administration, and individual transit agencies could act upon to bring about the vision of growing transit ridership and improving the transit experience for all riders.
As of December 2025, the final report is out. However, much of the final report’s recommendations fall short of providing the promised policy steps upon which lawmakers could act in the next legislative session and beyond.
Below is a summary of the report and the Association’s response.
Warning signs of insufficient details
In July 2025, CalSTA released the first several chapters of a draft final report for initial comment by Task Force members and the general public. At the time, the Association – as well as many individual Association members – responded with deep concern that the draft insufficiently emphasized the decades of government underinvestment in transit overlaid by the successive funding shocks of public borrowing from transit funds in the early 2000s, the Great Recession funding cuts, and the ridership loss during the pandemic shutdown.
Even more concerning, the draft report suggested that it was the transit agencies that would have to address these systemwide economic failures and funding choices, alone, without specific new state support – and without acknowledgement that transit operators’ conditions vary widely in terms of resources, governing structure, and community environments.
Following the issuance of the draft report, the Association coordinated a series of responses amongst the 12 Association member representatives serving on the Task Force, as well as the Association’s internal Transit Transformation Advisory Committee (TTAC) within the Association’s Executive Committee. Ultimately, the Association gave a consistent message to CalSTA in the final Task Force meetings and through public comments: the final report must thoroughly and comprehensively disclose the reality of the funding crisis and other obstacles faced by transit agencies, and it must provide a detailed legislative roadmap to address these problems.
The final report: what’s in it, what’s not, and what the Association wants
Here’s the good news: In the opinion of the Association, the final report now accurately explains the near-term funding crisis and resulting risks to ongoing operations that transit agencies currently face, from the ongoing slow ridership recovery and lost revenues, to rising costs associated with the mandated transition to zero-emission technologies, to the instability of once-stable transit funding sources. This accurate assessment of some major concerns within the report provides an important starting point for ultimately making recommendations that lawmakers can follow.
Commendably, the report also provides recommendations for which the Association gave detailed input, including needed actions to improve transit safety and security, transit prioritization, first-mile/last mile connections to transit, land use, and transit-oriented development. The Association has a long legislative history in supporting lawmakers’ efforts to improve these areas.
Unfortunately, some of the most important recommendations included in the final report – those with regard to funding and reforms to the Transportation Development Act (TDA) – were insufficient in both scope and level of detail to provide lawmakers with actionable steps to fix the funding crisis and bring about the viable vision for the future of transit indicated by the Task Force’s mission. Some statements that were originally included in the draft report were diluted or even removed from the final report.
Of primary concern to the Association was the Task Force’s high-level review of transit operators’ funding needs and its limited discussion on new revenue mechanisms. Due to CalSTA’s limited budget, the report offered only estimates of funding needs based on assumptions about operational growth, cost efficiency, and new mandates for capital expenditures. As a result of the report’s findings on this less precise analysis and the limited discussion afforded to developing funding recommendations, the final report offered few detailed recommendations on transit funding. To the extent that the report addresses transit funding, it generally focuses on options to reprogram and refocus existing transportation revenue sources, provide transit operators more flexibility to place local funding measures on the ballot, and create opportunities for revenue through value capture and expanded financing tools.
Ultimately, regarding the report’s recommendations for funding, the Association responded, “The Association believes strongly, like other Task Force members, that reprogramming existing transportation revenue sources, supporting additional flexibility to achieve self-help, supporting value capture, and encouraging efficiencies will make only minor progress toward transit operators’ short-to-long-term funding needs. We believe that the Legislature must continue to work with the Association to establish new state transit funding for transit operators.”
The Association concluded that the Task Force report’s recommendations on TDA reform would also benefit from greater actionable detail. The report accurately stated that transit operators now struggle to meet the farebox recovery ratio (FRR) and operating cost per hour requirement for the Local Transportation Fund and State Transit Assistance Program, respectively, which discourages service expansion and innovation. Under current law, when transit operators do not meet the requirements, they are penalized under existing law and barred from having full use of this funding for both operational and capital purposes.
Ultimately, to spur expansion and innovation, as well as to relieve the unfair burden of these performance metrics on transit agencies, alternative performance measures must be established through TDA reform.
Unfortunately, the report’s recommendations for alternative performance measures lack the substance necessary for the Legislature to tackle the needed reforms. The report simply advised to remove the farebox recovery penalty and require agencies to establish plans to address deficiencies through existing audit processes, eliminate the unmet needs process to require LTF funding to be spent on transit, and establish a new working group with statutory deadlines to draft and finalize metrics and performance measure in lieu of farebox recovery and cost inflation penalties. These are important first steps but will likely prove to be insufficient to address the Legislature’s interest.
The Association summarized its position thus: “TDA reform, coupled with new funding, is essential to the long-term stability of public transit. We believe that the Legislature must continue to work with the Association to develop alternative performance measures to the FRR and operating cost per hour requirements in TDA.”
The Association sees these insufficient recommendations as the result of a flawed Task Force structure, which prevented necessary discussions between Task Force members and subject matter experts and limited opportunities for debate and development of the recommendations.
To see the Association’s extended response to the report, please see the Association’s letter.
What’s next?
While many of the recommendations in the final report fall somewhat short for member agencies, the report benefitted from the hard work and active participation of the Association’s 12 member representatives who served on the Task Force and the Association’s internal TTAC members. The report also benefitted from the work of individual Association member agency representatives and staff who responded to the 2024 survey coordinated with the California Association for Coordinated Transportation (CALACT), provided informal input to the Association’s responding committees, and offered public comments. The active input and involvement of Association leadership and general membership helped secure the inclusion of key topics of importance in this final report.
Despite the mixed results of the Task Force’s work and final report, the two-year discussion and Task Force recommendations both provide room for new opportunities to transit agencies in the near term.
“Given the Task Force report’s limitations, we look forward to working with the Legislature in 2026 to fill the gaps left by the report and to advance the recommendations on which we mutually agree,” wrote Michael Pimentel, Executive Director of the Association, in the Association’s response letter to the final report. “Together, we can deliver on the promise of a more equitable, sustainable, and efficient transit system that meets the needs of all Californians.”
The Association is now preparing for the 2026 budget negotiations and legislative measures. For more information about this effort and ways that individual transit agencies can get involved, see the lead story in this issue of Transit California.