Muni Sector Outlook: Mass Transit’s Fragile Funding Model

September 23, 2025 — Mass transit systems continue to face financial strain despite modest ridership recovery post-pandemic. While passenger fares make up a small portion of revenue, heavy reliance on government subsidies introduces political risk and funding uncertainty. Without fare adjustments or increased investment, many operators risk service disruptions and deteriorating infrastructure. Given these structural challenges and tight credit spreads, we remain underweight the sector.