Outlook 2026: Rail transit leaders plan around budgetary constraints to improve service, cut costs while awaiting key legislative action

Compiled by Bridget Dean, Associate Editor

Transit agencies across the United States have spent the past five years expanding, improving and adjusting service offerings to meet ridership trends that emerged following the 2020 pandemic, all while facing rising operational and capital costs from tariffs, inflation, workforce challenges and other impediments. It’s a balancing act that requires extensive planning from agency leaders.

Heading into 2026, some transit agencies have a clearer picture of what lies ahead, thanks to earlier action from state and local partners on securing sustainable sources of funding. But others still await legislative decisions on funding to ensure service reliability beyond the present and near future.

So, although a number of transit agencies have their budgets in good stead — still allotting for enhancements and state-of-good-repair work under financial restrictions — there are a number that are facing looming service cuts.

Beyond local and state funding, the current surface transportation legislation, known as the Infrastructure Investment and Jobs Act of 2021, will expire on Sept. 30, 2026. The legislation that succeeds it has the potential to reinforce transit rail across the country through improved funding and streamlined grant processes.

Agencies for the most part have shored up their operating plans for 2026, but they still have questions about what the next reauthorization will bring.

Progressive Railroading surveyed a sample of U.S. transit agencies to garner insight on what 2026 will bring for passenger rail in general, including ridership trends, planned capital projects and the fiscal outlook. The following responses are provided by Phillip Eng, general manager of the Massachusetts Bay Transportation Authority (MBTA); Jonathan Hunt, interim manager and CEO of the Metropolitan Atlanta Rapid Transit Authority (MARTA); Jessica Mefford-Miller, CEO of Valley Metro; Bob Powers, general manager of Bay Area Rapid Transit (BART); and Justin Vonashek, president of MTA Metro-North Railroad.

Phillip Eng
Massachusetts Bay Transportation Authority

Jonathan Hunt
Metropolitan Atlanta Rapid Transit Authority

Jessica
Mefford-Miller
Valley Metro

Bob Powers
Bay Area Rapid Transit

Justin Vonashek
MTA Metro-North Railroad

What were ridership trends in 2025, and what do you project for 2026?

ENG: MBTA total ridership in 2025 has steadily increased every month over the same month in 2024. These increases have been driven by strong ridership growth on the subway, especially the Orange and Red lines, where weekday ridership as of September 2025 was up 9% and 23%, respectively.

These increases are in large part due to restoring public trust in the T (MBTA) — we have enhanced the reliability of our service following the completion of our Track Improvement Program and improved frequency on all modes, leading to seamless connections between our buses, subways and trains.

The MBTA anticipates that system-wide ridership will continue to see modest increases across all modes in 2026, driven by increased operator hiring and training, which support shorter headways, reliable schedules and fewer dropped trips. Other factors driving ridership increases are service improvements and modernization efforts such as improved rolling stock.

HUNT: In 2025, ridership across the MARTA system remained below pre-pandemic levels, but totals began to rise as more employers, including MARTA, brought staff back to the office.

Rail ridership for major events is now matching pre-pandemic levels, although we continue to see lower numbers during the traditional morning and afternoon peak commutes. Rebuilding ridership by bringing back former customers and attracting new ones remains a priority. We will work to do so by delivering excellent service to those who depend on MARTA today.

One bright spot has been our MARTA Mobility paratransit service, which has now surpassed its pre-pandemic ridership. Mobility trips are up 10% from before the pandemic and 200% from the low point in April 2020, the fastest growth rate of any mode we operate.

Looking to 2026, we are cautiously optimistic. Our new rail station faregates, combined with better data collection, should support rail ridership growth. Atlanta’s role as host of eight matches for the 2026 FIFA World Cup will also bring a surge in summertime ridership as visitors travel to matches and celebrations across the city.

Our focus remains on delivering safe, clean and reliable service every day. By centering the customer in all we do, we are working to rebuild trust, restore confidence and continue our ridership recovery.

MEFFORD-MILLER: Valley Metro ridership is growing across bus, streetcar and light rail. New light-rail extensions are a major driver of ridership growth — the Northwest Extension Phase II, which opened in early 2024, more than doubled ridership in fiscal-year 2025.

The South Central Extension, which opened in June 2025, recorded 762,000 trips in its first four months and was accompanied by frequency improvements on all rail services.

Valley Metro is also undertaking a comprehensive analysis of the bus system — the Bus Network Redesign — which will make recommendations for improving bus and rail connections to enhance mobility and increase ridership on both modes.

POWERS: BART ridership continues to grow, with notable gains on weekends, as Saturday ridership in September 2025 was nearly 20% higher compared to the previous year. More than 5 million trips were taken on BART in September, exceeding expected trips by 5%.

Overall, ridership saw a nearly 10% increase over the same month last year. The increase in ridership on the weekends, especially Saturdays, demonstrates that people are taking BART for purposes beyond getting to the office.

BART’s strongest ridership days of 2025 came in September, including the highest daily total of the year when 219,918 riders took BART on September 10. In late September, BART started running longer trains on most of its lines in response to a recent surge in ridership. The longer trains will expand capacity as more riders take BART.

VONASHEK: Metro-North ridership continues to grow, currently averaging approximately 240,000 trips each weekday with total year-to-date ridership as of September up 6% from 2024. Total September ridership of 6.3 million stood at 87.5% of pre-pandemic ridership in September 2019.

Our fastest-growing markets are monthly commutation rides, rides on our City Ticket (a $5/$7 flat rate ticket for travel within New York City), and the New Haven Line’s Waterbury Branch. Ridership on the City Ticket — which now includes weekday and peak travel — has almost 1,000 more daily intracity riders than pre-pandemic.

Bronx stations are reporting over 150% of 2019 ridership. Thanks to long-planned improvements on the Waterbury Branch, year-to-date ridership is up over 30% compared to last year, and just over 150% of 2019 levels. We know our customers love the safe and reliable service we provide, and adding frequency continues to draw more ridership.

Next year, we’ll continue to meet our customers where they are and take them where they want to go. From service expansion on the Hudson Line to Albany, to additional frequency in the reverse direction during peak travel times to allow for more flexibility with reverse commutes, we expect more riders to return to our service.

What does your state and federal funding picture look like for 2026, and how is it different from previous years?

ENG: Massachusetts Gov. Maura Healey and the Massachusetts Legislature have been truly supportive of the MBTA’s role and responsibility to deliver a safe, reliable, well-balanced and multi-modal transportation system that drives economic growth and enhances quality of life for all that live, visit and work in Massachusetts. The MBTA has committed to doing business differently, focusing on meaningful projects that deliver tangible results to the public — on time and on budget — to maximize the funding available to us.

Our operating budget is less dependent on federal funding, and the state budget from the Healey-Driscoll administration includes a healthy amount for the T’s state contract assistance that allows us to build off of our successes over the last two years.

There is a $156 million (50%) increase in contract assistance revenue in the MBTA’s FY26 operating budget thanks to investments made in Gov. Healey’s budget and FY2025 supplemental budget, as well as an increase in fare revenue.

HUNT: MARTA’s federal funding outlook for FY2026 remains consistent with previous years. The authority receives both formula and discretionary federal funding.

Formula funds are allocated through a federal and regional process that considers factors such as service levels and demographic data, providing a relatively stable funding base.

Discretionary funds, on the other hand, are awarded competitively through grant applications that MARTA prepares to align with the specific objectives of each funding opportunity.

MARTA does not have a dedicated or guaranteed source of state funding. We are currently pursuing a grant request for FY2025 state transit trust funds. While the receipt of state funding can vary from year to year, MARTA continues to work closely with state partners to identify and secure available funding opportunities as they arise.

POWERS: Like other transit systems across the country, BART has been fortunate to receive nearly $2 billion in federal, state and regional emergency assistance since the start of the pandemic to keep trains running and improve service and cleanliness, but this funding will be fully used up by spring 2026.

BART is facing ongoing structural deficits ranging from $350 million to $400 million per year beginning in FY2027. BART is analyzing significant service cuts scenarios in the event new ongoing funding is not secured.

MEFFORD-MILLER: Transit across the valley is funded by local sales tax revenue and Maricopa County’s regional half-cent sales tax, which was renewed in 2024 with transit’s share of that half-cent tax increasing from 33% to 37% beginning in January 2026.

Currently, the state of Arizona does not fund transit capital or operational budgets. Federal funding through the Infrastructure Investment and Jobs Act remains stable through FY2026. If Congress does not pass a new bill, a temporary extension is expected.

Flat federal levels provide predictability, but don’t keep pace with inflation. Valley Metro is prioritizing reliability and rider-focused investments while continuing to advocate for strong federal support.

VONASHEK: MTA led the sounding of the alarm on transit funding issues coming out of COVID-19. New York Gov. Kathy Hochul took the lead and closed the gap, keeping transit funding high at a time when it was critically important to maintain our operations. That investment and foresight paid off. Ridership is rebounding rapidly.

MTA and Metro-North are now implementing the $68.4 billion 2025-2029 capital plan. Metro-North’s portion of that capital plan is $7.7 billion — the largest in its history. The MTA has proven that any discussion of funding includes attacking costs, and we are doing that aggressively and will continue to do so by finding ways to do business differently.

This major capital commitment will focus on state-of-good repair work, help harden Metro-North’s infrastructure against impacts from increased frequency and intensity of storms and extreme weather events, and enhance accessibility for our customers.

On federal funding, we are watching closely to make sure tax dollars paid into Washington, D.C., come back to the New York metropolitan region.

The bulk of federal funding for the MTA comes from formula grants through the Infrastructure Investment and Jobs Act. MTA continues to receive about $2.1 billion in annual formula grant funding, and we anticipate that will be the case for 2026 as well.

The Infrastructure Investment and Jobs Act is expiring on Sept. 30, 2026. What would you want addressed for transit rail in the next surface transportation reauthorization bill?

ENG: Robust investment in public transportation ensures mobility to millions of Americans every day and is critical to driving the economic growth of the nation. A well-balanced transit network across all modes — subway, buses, trains and ferries — is an essential driver for regional vitality, and investments in public transportation needs are investments in the public, allowing communities to thrive.

Within the greater Boston region that the MBTA serves, we have made tremendous progress in using taxpayer funds wisely, maximizing every dollar in every corner of the organization to provide the safe, reliable service that riders deserve and that our region can be proud of. This progress can be further strengthened by the next surface transportation authorization act in a number of ways.

We hope to see the opportunity for additional formulaic funding for added stability, streamlining programmatic funding sources to accelerate project delivery times, and new and expanded public-private financing tools that support even more investment in public transit.

HUNT: We have developed several recommendations for consideration in the next surface transportation reauthorization act as the Infrastructure Investment and Jobs Act approaches expiration on Sept. 30, 2026. At a high level, we would like to see provisions that modernize federal processes, strengthen program flexibility and ensure that rail transit agencies can deliver projects more efficiently and safely.

First, Congress should streamline the National Environmental Policy Act and related environmental review requirements to reduce duplicative steps, accelerate decision making and shorten project delivery timelines without compromising environmental stewardship. Predictable and timely federal reviews are essential for major transit investments to move forward.

Second, we recommend reexamining the criteria used to qualify projects under the Capital Investment Grant (CIG) program. We would encourage adjustments that place bus rapid transit projects on more even footing within the Small Starts category, ensuring that communities pursuing cost-effective, high-capacity transit solutions can compete fairly for federal support.

Finally, enhanced flexibility within federal security and safety-related formula funds would better equip transit agencies to address evolving threats and operational realities. Allowing a broader set of eligible uses would help agencies invest in prevention, response, resilience and emerging safety technologies.

These updates would help rail and transit systems deliver projects faster, expand mobility options and strengthen security for the riders we serve.

MEFFORD-MILLER: Valley Metro is advocating for increased federal transit funding, streamlined project reviews and more balanced treatment between transit and highway programs. Many small transit improvements currently face disproportionate federal requirements that slow delivery.

The agency is also urging Congress to simplify and speed up the Capital Investment Grant process so agencies with strong project-delivery records can expand rail service more efficiently.

POWERS: BART’s federal and state advocacy efforts are guided by annual goals adopted by our board of directors. The goals reflect BART’s legislative priorities and provide guidance for the district’s activities in Washington, D.C., and the state capital in Sacramento.

Among BART’s federal advocacy goals is to engage in early discussions regarding surface transportation reauthorization, including advocating for new formula funding for transit operations, eligibility of state-of-good-repair capital investments, and other policies favorable to the district.

VONASHEK: Our first priority is to build on the success of the Infrastructure Investment and Jobs Act to sustain the momentum created by that additional funding. To do that and ensure long-term investment in our transit infrastructure, we want the funding levels made permanent and the regular annual budget to reflect those long-term ongoing investments going forward.

We’d also like to see an emphasis on formula over discretionary grant funding, as it allows for predictability in planning and budgeting for our operations going forward. Formula funding also has a lower administrative burden to access and is more flexible in its use than discretionary funds.

That means that as the MTA continues to do business differently and find efficiencies in all areas of its operation, it can efficiently put those federal dollars to work.

What are some major capital projects that will be underway in 2026?

ENG: In 2026, the MBTA is focused on continuing major upgrades that provide a more modern, reliable ride that passengers deserve.

To increase operational efficiency and improve scheduling reliability, we’ll fully complete our Red and Orange Lines signal modernization project, begin upgrade work on signals within the Green Line tunnel and advance work on commuter-rail signals at North Station.

We’re advancing many accessibility and customer improvement projects within stations across the system next year, including the Ruggles, Jackson Square and Downtown Crossing stations, many Green Line light-rail stations, Newtonville Commuter Rail Station and the Hingham ferry dock. We’ll also continue work to install mini-high platforms at our commuter rail stations to make them even more accessible for every passenger.

Our maintenance facilities will advance major upgrades, including beginning work at the Widett rail layover yard.

We’ll also continue to add new commuter-rail locomotives, new cars to our Red Line subway fleet and the first pilot cars of our new Type 10 “supercar” Green Line train. Infrastructure work to accommodate the Type 10s will continue, too.  

As we build a system that supports future generations of riders, we’re collaborating with our federal, state and local partners to enhance and reimagine service through projects like the implementation of regional rail, work to improve frequencies and efforts to shorten trips across all modes of transportation.

HUNT: MARTA has several major capital projects underway in 2026 that will modernize the system and directly respond to customer feedback. We call them the “Big 6 in ’26,” and each one delivers a safer, more reliable and more convenient experience for our riders.

Among those six projects, our new CQ400 rail cars will begin entering service in 2026. These state-of-the-art trains with open gangways will offer a smoother, safer ride with improved technology and comfort. Multiple trainsets will be in operation by the time Atlanta hosts the World Cup.

We are rolling out Better Breeze, our new fare payment system. Launching in April 2026, it will allow customers to tap a credit card, debit card or smartphone to pay, creating a more seamless experience.

Rail station rehabilitation continues systemwide. Our hub Five Points Station is undergoing a transformation at the street-level with the deconstruction of the station’s concrete canopy, and improvements are underway at the platform level with new the installation of new flooring, walls, lighting and seating. The platform work will be complete for the World Cup, and while the street-level work will not, the station will remain open and welcoming to visitors.

Finally, we are preparing the entire system for the 2026 FIFA World Cup with enhancements to operations, cleanliness, safety and wayfinding. MARTA will serve as a vital connection from the world’s busiest airport to downtown hotels and venues to tourist attractions and historic sites. We are encouraging everyone to Let MARTA Drive to the soccer matches and many events and celebrations over the monthlong period.

MEFFORD-MILLER: Following the June 2025 opening of the South Central Extension/Downtown Hub, Valley Metro is advancing westward with the Capitol Extension to connect downtown Phoenix to the state capital. The project is in advanced design with continued community outreach. Planning and engagement are also underway for a future extension that would travel west along the Interstate 10 corridor.

Valley Metro is also expanding its streetcar system with the Rio-East Dobson Streetcar Extension, which will add 4 miles of service from Tempe into west Mesa, establishing it as a regional service. The project received a federal $15.9 million Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant that is helping advance it through preliminary engineering and early design.

POWERS: BART is thrilled to have successfully completed our top priority capital project of 2025 by replacing all of our fare gates, more than 700 systemwide at 50 stations. For 2026, we are focused on modernizing the train control system to a state-of-the-art communications-based train control system (CBTC).

The new CBTC technology will roll out for BART mainline deployment in eight geographical phases, with the ability to run 28 trains per hour in each direction through the Transbay Tube in 2030 and up to 30 trains in 2032.

BART is also prioritizing system rebuilding through a program to replace rail infrastructure and traction power equipment and by repairing tunnels and structures.

VONASHEK: Metro-North’s 2025-2029 capital plan includes $6 billion for our core capital work and another $1.7 billion for the Grand Central Terminal (GCT) Artery. A key goal of the core program is to address aged, deteriorated station platforms.

A project already in construction will replace Woodlawn and Williams Bridge Stations and rehabilitate Botanical Garden Station, bringing accessibility, security and customer communications upgrades.

The GCT Artery carries 98% of all Metro-North service along a 4-mile stretch over and under Park Avenue from GCT to the Harlem River Lift Bridge, and it’s starting to show its 100-year age. While GCT went through rehabilitation in the 1990s, much of the artery’s critical infrastructure needs repair. Working with MTA Construction & Development, we shaved nearly 51 months off the project’s timeline with innovative collaborative construction methods, saving $93 million, and we’ll continue to use lessons learned to find more ways to innovate.

We recently announced that working with Amtrak, we’ll begin new service starting in late 2027 between New Rochelle and New York Penn Station, stopping at three new Bronx stations — Parkchester, Morris Park and Co-op City. This will open doors for Bronx residents, connecting neighborhoods to opportunities, jobs, education and cultural destinations.