Senate Bill (SB) 125

In July 2024, California Governor Gavin Newsom signed two important bills into law — Assembly Bill (AB) 102, the Budget Act of 2023, and Senate Bill (SB) 125.

SB 125 focuses on transportation and helps allocate $5.1 billion from AB 102’s budget. This funding is meant to support transit providers with both their everyday operating expenses and capital projects, such as bus purchases. SB 125 also kickstarts the creation of the Transit Transformation Task Force, aimed at shaping the future of public transit in California.

SB 125 explains how funds will be shared across two important programs:

• Transit and Intercity Rail Capital Program (TIRCP) will divide $4 billion based on population size to regional transportation planning agencies (RTPAs). These agencies can choose to spend the money on running transit services or on capital purchases such as buying buses. For San Joaquin County, the San Joaquin Council of Governments (SJCOG) is the RTPA  tasked with the distribution of these funds in San Joaquin County.

• Zero-Emission Transit Capital Program (ZETCP) will provide $1.1 billion to RTPAs. The money will be distributed using a formula that considers population size and transit revenues, helping to support zero-emission transit vehicles and operations. For San Joaquin County, SJCOG is the RTPA tasked with the distribution of these funds in San Joaquin County. These funds are highly flexible and can be used to address fiscal operating challenges and transit capital needs.

In the days leading up to SB 125, various programs were reviewed as possible conduits with which to distribute the SB 125 dollars to the transit agencies. The TIRCP program was seen as a program that could allow a quick distribution of the new dollars to the transit agencies, thereby avoiding unintentionally bypassing some transit agencies that might not qualify for access to the funds if other existing funding programs were instead utilized.

Unfortunately, in utilizing TIRCP as the conduit, the state unintentionally created a loophole for RTPAs to distribute the funds for unintended uses, including projects planned but not currently operating in service. RTPAs across the state have allocated SB 125 for uses other than the intended uses.

The intent of SB 125 was to provide much needed financial assistance to existing transit agencies that currently operate transit in revenue service. The intent is to help them overcome their fiscal operating and capital challenges for the next few years as transit agencies across the state of California struggle to recover and expand beyond pre-pandemic service levels and to overcome the loss of ridership and the inflationary impacts of the pandemic on agency revenue service hours due to the escalating cost of goods and services. One of the state’s stated goals is for the money to be used to help transit agencies increase their revenue service hours on the street, beyond pre-pandemic service levels, as they attempt to recover and grow ridership.

The COVID-19 pandemic had a big impact on RTD, but most of its services are now back to the same levels as before the pandemic. RTD is focused on helping underserved communities by making sure everyone has access to reliable public transportation. Safety and security are top priorities for RTD. One of its core values is protecting employees, riders, and the community by improving how safe and secure its transportation system is.

• Give temporary funding to help transit operators manage costs while finding long-term solutions to their fiscal challenges
• Help transit operators avoid cutting services and boost the number of people using public transit
• Focus on keeping transit available for people who rely on it the most
• Support transit agencies that serve a large number of riders in the region

In an effort to increase ridership, RTD has implemented substantial service improvements to focus on restoring and improving service to underserved communities in Stockton and the rural areas of San Joaquin County, including Hopper and Van Go! service connecting the cities within San Joaquin County. As the direct result of recent service improvements, bus service now runs more frequently on some routes and later into the evening, making it easier for people with late work shifts or evening plans to get around. Upcoming service improvements include weekend service improvements and the restoration of weekend service on some Hopper routes.

Spring 2023

• February 27: (Before SB 125) RTD CEO Alex Clifford, was one of two transit CEOs in the state who was asked to testify before the Joint Senate and Assembly Transportation Committee on transit funding needs to boost ridership.
• Throughout Spring: Mr. Clifford actively participated in the California Transit Association (CTA) Executive and Legislative Committees, advocating for equitable funding distribution of any new funds under the “A rising tide lifts all boats” philosophy. CTA played an instrumental role in what later became SB 125 funding that was included in the budget bill later that year — AB 102.
• May 9: Director of Government Affairs Ken Baxter represented RTD at the California State Transportation Agency’s (CalSTA) Transit Listening Session in San Francisco, discussing transit funding, legislation, and policy.

Summer 2023

• June 16: Mr. Clifford informed the RTD Board of a last-minute budget proposal restoring $2 billion to TIRCP, and allocating $811 million for ZETCP. San Joaquin County could receive up to $92.5 million over three years.
• July 10: Governor Newsom signed AB 102 and SB 125, providing $5.1 billion in transit funding and establishing the Transit Transformation Task Force. Mr. Clifford notified SJCOG that San Joaquin County would receive about $90+ million in new transit funding for the county, and he urged that there be a collaborative effort to determine the distribution of the new funds in San Joaquin County.
• August 24: SJCOG announced San Joaquin County’s $93.5 million allocation from SB 125 and began working with transit agencies on a funding distribution methodology.
• September 13-29: RTD, SJCOG, and others provided input on SB 125 guidelines. CalSTA finalized these guidelines and emphasized addressing ridership and fiscal needs. At RTD’s request, in a later revision CalSTA further clarified that the funds can be used to expand revenue service hours beyond pandemic lows.

Fall 2023

• October 26: SJCOG shared with their Board that the allocationof $5.1 billion statewide transit funding would be through regional planning agencies, with local discretion guided by SB 125 goals.
• November 30: SJCOG formed an SB 125 Working Group to frame the draft initial methodology for distributing the first two years’ allocation of San Joaquin County’s $93.5 million.
• December 8: CalSTA announced the Transit Transformation Task Force members, including 12 CTA representatives.
• December 19: The Task Force held its kickoff meeting, focusing on recommendations to grow ridership and address operational needs.

Winter 2024

• January: Mr. Clifford urged SJCOG to expedite funding recommendations, emphasizing fiscal deficits. On January 25, SJCOG approved a $67.8 million apportionment for FY 2024/2025 and 2025/2026. RTD has been identified to receive $43.3 million (64% of funds).
• February 22: SJCOG finalized the distribution methodology, using ridership and operations budgets.
• February 23: Mr. Clifford was appointed to CTA’s Transit Transformation Advisory Committee.
• April 29: A state spending freeze paused $2.4 billion of SB 125 funds. Subsequently, Mr. Clifford and CTA advocated for the state to fully fund its commitment to SB 125.

Spring 2024

• May-June:  Mr. Clifford contributed to CTA efforts to maintain SB 125 funding amid a state budget deficit.
• He was interviewed by representatives from the State Transit Transformation Task Force as a subject matter expert on the Transportation Development Act (TDA), providing his expert opinion relative to much needed TDA reform.

Summer 2024

• August 5: RTD’s edits to the SB 125 Allocation Packet Narrative, which included increases in revenue service hours, were accepted by the SJCOG and approved by the state, and soon thereafter the first SB 125 check was issued to SJCOG.
• August 21:  In order to get the money flowing, RTD requested SJCOG circulate draft subrecipient agreements for review before finalizing. This was later done and RTD commented on, and later protested certain language contained in those documents relative to the SJCOG misinterpreting the intent of SB 125 and the SB 125 Guidance document. The disputed language is concerning because the SJCOG Board made it clear in early 2024 that they intend to “claw back” funds not used for an agency’s fiscal deficit. SJCOG’s interpretation of a “fiscal crisis” is unclear in its documents. RTD is carefully monitoring this subject matter because any “claw back” of SB 125 money budgeted and spent may impact the service we provide our customers. Please stay tuned.
• March 2025: SJCOG received the County’s first allocation of SB 125 from the state in August 2024. As of the publishing of this document, RTD has yet to receive any SB 125 from SJCOG.

Mr. Clifford remains an active CTA Executive and Transit Transformation Advisory Committee member, participating in weekly meetings to help guide SB 125 funding and the Task Force’s recommendations.

Check back for more updates in the future.