Select committee makes incremental progress toward regional funding agreement
The Regional Transportation Funding Select Committee convened by the Metropolitan Transportation Commission made incremental progress this week building agreement on provisions of a regional transit funding measure.
Despite attempts by MTC leadership to advance a measure that wouldn’t fully cover transit’s projected funding shortfall, and therefore bake in service cuts, Select committee members expressed increased levels of support for options that would save and improve transit.
A new option brought forward by SFMTA includes some promising solutions. A new poll from BART (draft) reveals that a regional approach is critical for Bay Area transit. Debates remain, with a few months left until the start of the 2025 legislative session when authorizing legislation is needed.
Over the next 6 weeks it will be critical to keep the pressure on at MTC and keep raising awareness about the needs of transit riders and the importance to the regional to save and improve transit.
Next stop, MTC
The Select Committee, with representatives from the MTC, legislature, business, labor, and advocates, is now disbanded. The debate shifts to the MTC now and into the legislature at the beginning of 2025.
New polling from BART (link to draft here) indicates that a signature-gathering initiative will almost certainly be needed - and opens more questions. More polling is expected from MTC, SFMTA, and other agencies early in the New Year.
Key milestones are coming up at the MTC, at the Legislation Committee on Friday, November 8, and a special MTC Commission meeting on December 9. Because key polling results aren’t expected until the New Year, we expect that the discussion will continue into early 2025.
Agreement before the 2025 legislative session is important to set the stage to pass authorizing legislation for regional funding.
A new “operator-coordinated” option crafted by SFMTA with variable taxes per county
SFMTA’s finance team presented a new option they had developed with several promising features for addressing the fiscal cliff, prioritizing transit, and acknowledging differing needs around the region.
It would cover 5 or 9 counties. Interestingly, it would allow every county to set their own level of tax. For example, county-specific parcel tax rates per square foot that would vary by county: $0.11 to $0.199 in all counties except San Francisco, which would adopt the higher rate of $0.28. Funding beyond the amount needed to maintain transit service to be determined by the County.
It is a relatively short-term measure (11.5 years), intended to fund transit needs for a decade. The additional 18 months would be used for MTC finance and advance funding for the beginning of the time period when agencies have reached their fiscal cliff, the measure has passed, but the funds have not yet been collected.
SFMTA is working with other counties on formulas that would front-load funding for Muni, which has a deep, $200M shortfall, and provide more funding to other counties in the longer term. It has a goal of 95% county benefit over the life of the measure.
Incremental progress toward provisions of a regional approach
A large majority of the Select Committee supported a funding measure with at least 4 counties participating and the ability for others to opt in, and much less support for requiring all 9 counties to participate.
Fortunately, more Select Committee members leaned toward funding transit needs, rather than keying funding toward replacing lost fare revenue. Focusing exclusively on fare revenue is unfairly disfavorable for agencies that relied less on fares before the pandemic - and for the many low-income riders who depend on Muni and AC Transit.
Select Committee members were divided between shorter-term 10-year options and a longer-term 30 year option that reduced funding for transit after the first 9 years. Interestingly, North Bay leaders leaned toward a shorter measure and South Bay leaders leaned toward a longer measure. Look up the quote, I think Mahan said it would be easier to borrow against.
The type of tax continues to be a subject of contention. The Select Committee had the most people favoring a sales tax, with a minority dead set against. Half supported or were amenable to a parcel or payroll tax, with a larger minority dead set against.
Risks of opposition
Unfortunately, the two “no” votes for a 4+ County measure were from San Mateo County - one of the 4 counties. Some leaders in San Mateo County have been wrestling with how or whether to participate in a regional measure at all, with behind the scenes negotiations in particular about whether and how the County should support BART. BART’s new polling suggests that a county-by-county approach would break BART, harming San Mateo County.
A different faction with potential risks to regional transit funding came from the Alliance for Jobs (organization composed of construction companies and construction labor) and Bay Area Council, a business consortium. These organizations called for a “balance” that would focus on serving the Bay Area’s drivers. The approach these organizations supported in the Spring was two thirds capital funding including one third road building, even though that proportion would lead to massive transit cuts.
To summarize - there has been incremental progress, but hurdles remain to build enough agreement for a regional funding measure that is essential to save and improve Bay Area transit.