California lends BART $590 million to avert service cuts

California is lending $590 million to keep Bay Area Rapid Transit running — a “bridge” that looks suspiciously like a permanent pier.

The Los Angeles Times, citing Bloomberg, reports the state will provide the loan to prevent service cuts at BART as the agency struggles with post-pandemic ridership and revenue. The headline number is large; the underlying story is familiar: when a transit system’s operating model depends on peak-hour commuters and those commuters stop commuting, the farebox turns into a museum exhibit.

BART’s crisis is not merely cyclical. It is structural. U.S. transit agencies built budgets around farebox recovery ratios that assumed dense, daily office attendance. Covid-era remote work didn’t just reduce trips; it permanently changed demand elasticity. Riders who now travel two or three days a week won’t pay five-day-a-week fixed costs, and occasional riders are highly price-sensitive. Raising fares risks accelerating the downward spiral.

That leaves subsidies, which are politically easy in the short run and financially corrosive in the long run. A state “loan” keeps trains moving today, but it also socializes the consequences of earlier planning assumptions: expensive capital projects, long-term labor contracts, and pension and healthcare obligations that don’t shrink when ridership does.

The deeper problem is governance. Transit agencies are often structured as quasi-independent authorities with their own debt, boards, and labor regimes — a design that is supposed to insulate operations from politics. It insulates costs from accountability. When revenues fall, the agency can’t easily restructure like a private firm; it lobbies for emergency funding. The state, fearing service collapse, steps in. The result is moral hazard with timetable graphics.

Bondholders and contractors still get paid. Riders get the service — for now. Taxpayers get the risk: if ridership doesn’t rebound, the “bridge” becomes a recurring refinancing exercise. And because the loan is framed as temporary, it avoids the one debate that matters: what level of service is economically justified, and what should be cut, automated, or privatized.

BART is hardly alone. Across the U.S., urban transit systems are being reclassified from user-funded services into semi-permanent budget holes, justified by climate rhetoric and “equity” language while the actual product — safe, reliable transportation — deteriorates. The more politicians treat transit as a social program rather than a business with customers, the less it behaves like either.

California’s $590 million is therefore less a rescue than an admission: the farebox era is over, and the state is now the default rider.