Can Bay Area transit be saved from major service cuts next year without a tax increase by redirecting capital funds to operations? Advocates of the Bay Area transit sales tax are dismissive, and now a senior transportation policy advisor at SPUR, Sebastian Petty, has echoed their skepticism. But the pro-tax side is straw-manning our case for “flexing” capital funds to operations, rather than addressing our best arguments.
Petty mostly looks at the choice between capital and operating funds at the agency level, and he is correct to observe that these funds are, by and large, locked in. But we are looking to state policy changes rather than decisions at the agency level to move the money.
The state legislature passed enabling legislation for the Regional Transit Measure sales tax and a whole new political entity to distribute the tax money if its voters approve. So, the legislature clearly has a lot of authority to control the institutional landscape of Bay Area transit. And, I have a lot of confidence in the state legislature and our likely incoming governor to avoid a Bay Area transit Armageddon if the tax fails.
And it will be very easy for the legislature to do so. As a temporary fix, it can simply reallocate cap-and-invest funds from high-speed rail to transit. It just so happens that the current allocation of cap-and-invest funds to high-speed rail ($1 billion) is about the same as the amount of sales tax revenue ($980 million) is expected to raise in the first year.
And, contrary to Petty’s claims, the legislature could act quickly to reallocate this money. Last year, it took 10 days for Sacramento to gut and amend SB 840, the last legislative change to cap-and-invest allocations, pass it through both houses as an urgency measure, and secure the governor’s signature.
Admittedly, moving money from high-speed rail to local transit could delay the bullet train’s first departure from Merced to Bakersfield, which is now supposed to occur in 2033. But both the legislative analyst and the High-Speed Rail Authority’s inspector general have cast doubt on the prospects for achieving that date. The fact is that, with or without next year’s billion-dollar allocation, we may never see high-speed rail service in California.
And even if we do, there is no financial plan to get the bullet train to San Francisco. That undermines the already dubious case for the Portal, a 1.3-mile rail extension from San Francisco Caltrain Station to Salesforce Transit Center, where an elaborate terminal awaits. But Muni already connects to Caltrain Station, so you can already get from the peninsula to downtown without the new tunnel, and nobody will be coming from the Central Valley or Southern California for the foreseeable future.
The latest federal estimate puts the project cost at $8.25 billion with a service inception date of June 2036. It requires a mixture of federal and local funding. One component of that local revenue comes from toll hikes mandated by Regional Measure 3 in 2018.
While the Portal was in the list of RM3 projects voters approved, the legislature can change the allocation of RM3 toll revenues any time it wants by revising Section 30914.7 of the California Streets and Highways Code. About $224 million of The Portal’s $325 million RM3 authorization remains unallocated, and thus potentially available for transit operations.
The legislature could also alter the state’s Transit and Intercity Rail Capital Program (funded by cap-and-invest, just like high-speed rail) to stop granting funds to The Portal and other projects that do not meet reasonable benefit/cost thresholds. Further, it could rescind any previous grants that have not been legally encumbered.
Other local funding for The Portal comes from the San Francisco Proposition L 0.5 percent sales tax managed by the San Francisco County Transportation Authority. This money could also be redirected to transit operations, especially for Muni, with a voter-approved ballot measure.
As with The Portal, the legislature could direct toll and grant funds away from the Bay Area’s biggest transit project, BART to Silicon Valley Phase II. The Phase I project, which added stations at Milpitas and Berryessa, has had extremely disappointing ridership and the six-mile Phase II extension has experienced serious challenges with delays, cost-overruns, and mismanagement.
The latest federal estimates for the BART extension are costs of $12.75 billion and a service inception date of February 2039, by which time San Jose will undoubtedly be served by a dense network of autonomous vehicles. Once the state gives up on the project, Santa Clara County voters could be asked to repurpose $4 billion of sales tax revenue now dedicated to this project.
I agree with Sebastian Petty in this case: redistributing funds from the BART extension to transit operations in San Francisco would be difficult or impossible, because Santa Clara County officials are jealous of their locally generated funds. But pausing or canceling the extension would unlock enough money to close VTA operating deficits with money left over for Caltrain.
Petty also contends that flexing capital funds to operations is not a long-term solution. We don’t necessarily disagree. Our point is that there are more than enough poorly used capital funds to bolster Bay Area transit operations for at least two more years.
That gives officials time to come back to the ballot with a new plan in 2028 that opponents like us might accept. Such a plan would require agencies to seriously reduce overhead costs, address how they will adapt to a future with autonomous vehicles, and to the extent, that new revenues are needed, shift the burden away from those who are least able to afford it by replacing the sales tax with a more progressive tax revenue source.
Marc Joffe is treasurer of the Committee for Affordable Bay Area Transit, No on Measure RTM, sponsored by Contra Costa Taxpayers Association. CABAT is the FPPC-registered group opposing the November transit tax.
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