This November, San Francisco and four other counties are set to vote on new taxes that promise to solve looming structural operating deficits that plague the region’s transit agencies. Next to the Northeast Corridor, the Bay Area is the most transit-friendly region in the country. But the post-Covid-19 era has crippled the ambitious growth plans of transit agencies, which fiscal hawks say is the real problem. Plus, inflation-weary voters have been far less supportive of new taxes in recent years — even if they’re necessary to keep the trains running.
Connect Bay Area, set to appear on the November ballot in five Bay Area counties including San Francisco, would enact an additional 14-year sales tax generating roughly $1 billion per year to forestall predicted major service cuts at Bay Area Rapid Transit (BART), Caltrain, AC Transit, and San Francisco’s Muni system, as well as funding some improvements in safety, cleanliness, capital improvements and better integration among transit systems. The rate would be 0.5 percent in the four non-San Francisco counties and 1 percent in San Francisco.
San Francisco voters will also be voting on Proposition H, a parcel tax to help close Muni’s structural operating deficit. Dubbed the Stronger Muni for All measure, it would enact a tiered tax with base rates of $129 annually for single-family homes, $249 for multifamily apartments, and $799 for commercial properties, with higher charges scaled by property size. Landlords of rent-controlled units could pass up to 50 percent of the tax cost to tenants, capped at $65 per unit per year.
In the past, special taxes like these would require a supermajority to pass. Up until 2020, getting such taxes to be approved by voters hasn’t been a problem. Between 2003 and 2016, area voters authorized or reauthorized sales taxes or bond measures to expand or sustain local and regional transit.
But as with so many things, Covid-19 changed everything. Transit use in the region and the city fell dramatically, accelerating a shift toward remote and hybrid work.
More recently, agencies have had a rockier road to the ballot box. Several attempts at securing more funding have been pulled, scaled down, or delayed before reaching voters due to infighting and voter tax fatigue, one of many knock-on effects of the pandemic. Notably, in San Francisco, voters failed to secure the required supermajority for a $400 million bond to fund transit reliability and street safety improvements in 2022.
This time around, both taxes were placed on the ballot not by legislative action but by a coalition of advocacy groups, so they will only require a simple majority to pass under current law. It’s a tactic that has enraged fiscal conservatives around the state, especially because it was used to enact special taxes for controversial homelessness programs, such as Proposition C in San Francisco in 2018, which has been subject to multiple appeals, resulting in refunds and settlements. Indeed, voters across the state will also vote on Proposition 43, a ballot measure that, if passed, will undo the loophole.
But bypassing the supermajority requirement won’t ensure passage in the current political environment either. Last June, San Francisco voters rejected Proposition D, which would have increased the city’s “Overpaid CEO” business surtax, as well as a competing measure with more modest changes.
On top of this, another measure on the local ballot, Proposition G, to restore weekday vehicle access to the Great Highway, is sure to attract transit skeptics.
But Bay Area leaders in both government and business are promising strong support for the two tax plans.
More recently, agencies have had a rockier road to the ballot box.
“Every day, tens of thousands of Bay Area workers, residents and visitors rely on our regional transit systems to get where they need to go,” Libby Schaaf, president and CEO of the Bay Area Council, told The Voice. “That’s who these measures serve and why it’s critical our transit systems continue to operate at the highest levels of service. You can’t have a functioning, growing economy without strong transit. Period. These measures will also protect the billions of dollars we’ve invested over many, many decades to build these valuable systems connecting every corner of this region. And the strong accountability reforms these measures include will require our transit systems to become more efficient and fiscally sustainable.”
Additionally, large tech employers like Meta and Salesforce, along with San Francisco-based angel investor Chris Larsen, are backing the tax measures. The message is that without the extra funding boost, transit services will have to make major cuts, reducing availability and, in turn, ridership, creating a “death spiral” for the services.
“We’re going to see catastrophic service cuts; station closures, lines shut down,” Jeff Cretan, a spokesperson for the pro-tax campaign, told The Voice in an interview. “You’ll see train frequencies go to every hour, nighttime service cut. It’ll really impact people’s lives in a serious way.”
That, in turn, could have knock-on effects on the regional economy, as commutes are delayed, cutting off access to jobs and slowing the delivery of goods and services, thereby blocking downtown recovery. Cretan also argued that agencies have already made significant efficiency improvements and that neither the state nor federal government is expected to provide emergency operating funds sufficient to close the deficit.
Others disagree. “Bay Area transit doesn’t have a revenue problem nearly as much as it has a spending problem,” says Debora Allen, who served on the Bay Area Rapid Transit board for eight years:
“Asking taxpayers for another $14 billion without fixing the underlying cost structure, bloated management, and re-negotiating labor contracts is just financing the dysfunction. BART is getting a large portion of the proceeds from all 5 counties. They’ve never proposed a thoughtful plan of right-sizing the agency to meet the declining demand for the service and fill over $350 million in planned annual deficit spending. Had they done so in 2021, when their own projections showed there was no pre-COVID recovery in sight over the next 10 years, they could have preserved a large part of their $2 billion in bailout money from taxpayers across the state and the country.“
“This is the wrong time to ask for this kind of tax,” said Marc Joffe, president of the Contra Costa Taxpayers Association and a leading organizer against the regional tax, told The Voice. He argues that agencies should prioritize spending reforms over new taxes, contending that they’ve already received billions in federal, state, and local subsidies.
Joffe also said existing funding could be redirected from large capital projects — such as the Caltrain Downtown Extension, BART’s Silicon Valley expansion and Muni’s Central Subway — to preserve core transit operations without raising taxes. But tax supporters contend that most infrastructure funds are legally restricted and cannot simply be transferred to cover day-to-day operating expenses.
Cretan characterized proposals to shift money from projects such as high-speed rail or other capital programs as unrealistic under current state and federal law.
“The overwhelming majority of those capital funds, you cannot move them into operations costs by statute,” said Cretan. “That would require changes in the law and program changes at a state and federal level. It’s delusional to think that that’s where the conversation is gonna go, that all of a sudden things could turn on a dime.”
“My counter to that is that the state has previously allowed flexing of capital funds to operations in 2023,” Joffe responded. “The state can do anything it wants. It created a brand-new taxing district across these five counties to raise this money. If they could do that, they could figure out other ways to redesignate tax revenues. They can get this done.”
Joffe and other opponents have also criticized the proposed taxes as regressive, which would hit everyday people directly in their pocketbooks. Cretan contended that losing reliable transit would ultimately prove more expensive for residents.
“If we lose public transit, people’s lives will get dramatically more expensive. Even if you are someone who doesn’t take transit, people you know will have to bear those costs. It’s going to be harder for your local business to hire people, or your school to hire teachers. You’re going to see this play out in a dramatic way, because the costs are going to rise in other ways that are far worse. After housing, the next highest fixed cost for households is transportation.”
Regardless of which path is the best one to navigate transit agencies out of the fiscal woods, what’s also true is that they tend to garner skepticism when they try to expand service with grand projects. Earlier this year, San Francisco supervisors began exploring a further extension of the controversial Central Subway to North Beach and Fisherman’s Wharf, and it’s already drawn criticism.
And a recurring talking point in suburbanite and at-risk neighborhoods alike is the persistent belief that taking transit is a proposition that is always grotty at best and, at worst, unsafe.
During a supervisorial candidate forum held July 30 in the Bayview last week, one candidate, social worker Deandra Bryant, told attendees, “I’m gonna be honest, I don’t ride public transportation, because I don’t feel safe. I think we got to start there. … You have people who are on the bus using drugs. … You have people who assault the bus drivers. I think we need to create programs (so that) people like me will ride public transportation and feel safe doing it.”
Politics has also robbed San Francisco’s Metropolitan Transportation Agency (SFMTA) of opportunities to generate revenue. The agency controls up to 150 acres of land, including bus yards, surface parking lots, and parking garages, and it’s explored developing some of it for infill housing. When they first unveiled the Potrero Yard Modernization Project in 2019, the hope was that an attached housing development, half market-rate, half affordable, could cross-subsidize the infrastructure costs of rebuilding the bus yard. But political pressure forced a revision to subsidized housing only, causing the number of planned units to shrink dramatically.
Nevertheless, tax supporters are confident that they can overcome voters’ tax fatigue and get the measures passed. A new poll of 1,700 voters conducted by EMC Research projects 54 percent of the region’s likely voters supporting Connect Bay Area on the first ask.
“It’s a huge uphill battle for us,” admits Joffe, [but] we think that by person to person, word of mouth, and social media, we can make a contest out of it.”
