Borenstein: Bay Area transit tax plan goes off the rails as South Bay leaders object to bailing out BART, SF MUNI

Efforts to craft a Bay Area transportation funding plan are coming off the rails as South Bay leaders make clear that they don’t want their constituents taxed for up to three decades to bail out BART and San Francisco MUNI.

San Jose Mayor Matt Mahan, state Sen. Dave Cortese and Santa Clara County Supervisor Cindy Chavez are planning to announce soon the formation of a political committee to stop the tax proposal that could draw about one-third of its money from the South Bay county.

The plan, Mahan wrote Thursday in a letter to state lawmakers, “would ask Santa Clara County voters to provide an unfair level of subsidy to transit agencies that are facing fiscal cliffs but primarily serve other parts of the region.”

He’s right that the plan is unfair to South Bay residents. And the so-called “fiscal cliff,” at least in the case of BART, is a crisis of the transit agency’s own making.

Most directors at BART, for which weekday ridership remains at just 40% of pre-pandemic levels, refuse to make needed budget cuts and adjust service to match the new reality.

Instead, BART leaders continue recklessly pinning their hopes on a taxpayer bailout that would be on the 2026 ballot. But that measure would require enabling legislation from Sacramento and would be placed on the ballot by the Metropolitan Transportation Commission, a regional panel of primarily elected Bay Area officials.

It’s that legislation, Senate Bill 1031, introduced by Sens. Scott Wiener, D-San Francisco, and Aisha Wahab, D-Hayward, that has exposed the deep fissures among Bay Area leaders.

Thirty-year tax

The current version of the bill would allow MTC to place on the ballot a sales tax, payroll tax, property tax or vehicle registration surcharge lasting up to 30 years. Most had expected the commission to seek a half-cent sales tax hike in 2026.

MTC was originally a sponsor of the legislation. But bill amendments have eroded support so much that many commission members, including Chavez, said at a meeting Wednesday that they could not continue backing the legislation.

Then, on the Senate floor Friday, Cortese skewered it, warning that Santa Clara County might move to split away from MTC and that South Bay leaders would soon be launching the political campaign against the bill and the 2026 ballot measure.

Nevertheless, facing a procedural deadline, the Senate voted 26-10 to pass the bill, sending it to the Assembly with assurances that amendments there would provide opportunity for another review in the Senate. Wiener and Sen. Steve Glazer, D-Orinda, a key player in the negotiations, promised that the bill was a “work in progress.”

South Bay concerns

The legislation would only be the first step, providing MTC authority to place a tax measure on the ballot. But with political opposition from leaders of the Bay Area’s most populous county, Santa Clara, and largest city, San Jose, a tax increase could be in deep trouble at the polls.

South Bay leaders have good reason to be concerned, starting with Wiener’s mixed messages about the purpose of the tax. Is it to help BART bridge its self-inflicted, post-pandemic financial wounds, in which case 30 years is ridiculous? Or is it to implement an as-of-yet undefined plan to reshape and integrate Bay Area transit?

“If it’s a short-term problem we’re trying to solve, then it should have a short-term timeline,” Chavez said. “And if it’s a long-term problem we’re trying to solve, we should just say it out loud and take the time to do it right. And this does neither.”

Then there’s the devil in the details of the legislation.

The bill would allow MTC to seek the tax increase in just seven of the nine Bay Area counties. At the behest of Senate Pro Tem Mike McGuire, two counties in his district, Marin and Sonoma, were excluded out of a fear of tax fatigue as voters there face a separate ballot measure to fund their local rail system.

Santa Clara County officials fear the very same sort of tax fatigue could hurt their efforts when they go back to voters in coming years to extend their existing local transportation sales taxes.

Lack of control

A regional sales tax would also be a heavy political lift because Santa Clara County would provide 32% of the revenues for the seven counties, by far the largest share, but would have little control over how it’s spent nor receive benefits in proportion to its contribution.

The bill would allow four of the seven counties with a majority of the population to control the spending. That means that the three BART district counties, Alameda, Contra Costa and San Francisco, if they can join forces with another county, could impose their will on Santa Clara County.

Wiener counters that his bill provides “return to source” protections to ensure each area benefits in proportion to the money it puts in. But SB 1031 would only guarantee a 70% return to source for the first five years and 90% after that.

Moreover, the measure states that the return to source money would include spending for “transit operations funding for transit agencies that serves riders of that county.” It’s not clear how spending on BART, which now just tips into Santa Clara County, would count against its return-to-source allocation.

Meanwhile, the BART and MUNI bailouts would suck up more than half the money. A half-cent sales tax would raise about $1 billion a year; Wiener has said the two transit agencies need $600 million of that.

This bill is a mess. There’s no clear spending plan other than bailing out transit agencies, one of which is so dysfunctional that it refuses to make responsible cuts. Santa Clara County leaders are right to try to stop this train before it picks up speed.