The San Diego Metropolitan Transit System board of directors approved a plan on Thursday to freeze fares for low-income riders ahead of an expected fare increase in the fall.
MTS is facing a $94 million budget deficit for the next fiscal year, which begins in July. That deficit will increase to more than $122 million by 2030, according to MTS projections.
The agency’s financial troubles can be traced back to the COVID-19 pandemic and the subsequent collapse of ridership. San Diegans still take fewer overall trips on the system than before the pandemic, with 81 million rides in 2026 versus 86 million in 2019, according to MTS.
Since then, MTS has backfilled its operating revenue shortfalls with one-time state and federal funds and transfers from the capital improvements fund, which are intended for long-term infrastructure improvements and service expansions.
But the federal and state funds are set to run out soon, meaning MTS will have to find other revenue sources to fill the gap or cut service. The MTS board of directors voted to recommend increasing fares to the San Diego Association of Governments, or SANDAG, to help close the gap
As the region’s transportation planning agency, SANDAG ultimately controls the ordinance that sets fare prices. They’re set to vote on approving those fare increases for MTS and North County Transit District, or NCTD, in July.
But the MTS board voted on Thursday to freeze fares for low-income riders if SANDAG approves the fare hike.
San Diego City Council member Sean Elo-Rivera, an MTS board director, introduced a motion to freeze fares for riders who can show they are enrolled in the benefit programs CalFresh, CalWorks, or Medi-Cal.
“First and foremost is protecting people who are vulnerable, who depend on our system,” Elo-Rivera told KPBS. “And then the belief that having those folks stay in the system as riders who are paying something rather than nothing is actually better for the long-term health of the system.”
Elo-Rivera also asked MTS staff to prepare a report on how they are maximizing revenue from other sources, including ad partnerships, naming rights, and creative ideas like a tax on rental cars for tourists.
“When the alternatives to making more progress are either increasing fares for low-income riders or folks across the system and/or reducing services, I just want to see a maximum level of urgency to getting those non-fare revenues turned on,” Elo-Rivera said.
The MTS board had some concerns about the plan's uncertain overall impact. Staff was unsure how many people would be eligible, since they don’t normally collect that information from riders.
But overall the majority agreed it was a compromise plan that would protect riders who depend on the system most while still raising prices overall.
“Having the qualifiers be members or riders who are on CalFresh, on Medi-Cal, on CalWORKs that they would get the same fare, their fare wouldn’t go up, I think that is very fair,” Marcus Bush, board director and National City Council member, said at the meeting. “I think that is really taking a creative solution that takes into consideration the needs of the community.”
The fare increase won’t be enough to cover the agency’s deficits in the long term. The MTS staff presentation said that the fare increase will help delay the exhaustion of SB 125 state funding by an additional year.
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MTS 5 year budget forecast 2026.png (2342x1316, AR: 1.7796352583586625)
That presentation also shared MTS staff’s proposal, which included several ideas, including a tax on rideshare companies like Uber and Lyft. But staff were very clear that the most viable long-term solution would be a local sales tax measure dedicated to funding transit.
A county-wide sales tax measure to fund transit was very narrowly defeated in 2024. Still, the majority of voters in the county itself approved that measure, according to a KPBS analysis at the time.
“MTS currently lacks statutory authority to pursue most other funding,” Steve Goble, MTS board vice chair and El Cajon City Council member, said at the Thursday meeting. “So that implies the sales tax is kind of our clearest, most defined path at this point.”
Other major cities like Los Angeles and San Francisco have local sales taxes dedicated to funding transit. If the MTS board were to move in that direction, a similar tax measure could be on the ballot in 2028.
