A grassroots effort to tax Uber, Lyft, and Waymo and raise revenue for an ailing public transit system has hit a big snag.
Transit advocates who dreamed up the potential ballot measure for November didn’t realize that a broader measure to overhaul SF’s tax code, backed by business, labor, and political leaders, might squash theirs. Now they say they have no choice but to soldier on and gather more signatures. They need 10,000 to qualify for the ballot.
The ComMUNIty Transit Act would levy a tax between 1 percent to 4.5 percent on the revenue ride-hailing companies earn in San Francisco and generate $20 million to $30 million for SF’s transit agency, according to its authors.
It would be a sliver of money, relatively speaking. The San Francisco Municipal Transportation Agency (SFMTA), which runs public transit and is also in charge of streets and parking, has a $1.4 billion two-year budget.
In the short term, SFMTA says it will close next year’s $12.7 million budget deficit by raising Muni fares and parking fines by 8 percent, but those hikes won’t be enough to staunch a projected $214 million deficit for 2026-27 when pandemic emergency funds from the federal and state governments finally dry up. There’s no one on the horizon to rescue Muni, so the transit act organizers felt they had to act.
“The city is facing a budget crunch,” said Cyrus Hall, one of the act’s main backers, “and so the ComMUNIty Transit Act was designed to grow the pie, rather than just trying to get another general fund transfer [from City Hall] or somehow move other money around.”
The proposed measure would add another local tax to ride-hailing apps. In 2019, San Francisco voters approved a 3.5 percent tax on individual rides and a 1.5 percent tax on group rides. The fees have been passed down to customers. Uber, Lyft, and Waymo did not respond to The Frisc’s requests for comment.
SFMTA spokesperson Michael Roccaforte said the measure would only trim about 10 percent of the agency’s deficit, “but it shows the region that we’re doing all we can to make Muni more efficient and raise funds locally.”
If it passes, Roccaforte noted the tax would help “gain support” for a much larger funding measure for Bay Area transit systems that state Sen. Scott Wiener, who represents SF in Sacramento, is working to add to the 2026 ballot.
Update, 6/7/24: SFMTA spokesperson Roccaforte has clarified that SFMTA cannot take a position on a measure that is still gathering signatures, and his comments do not imply that SFMTA has taken a position on the ComMUNIty Transit Act.
Beware the poison pill
The transit act’s organizers submitted their measure to SF’s Department of Elections in late April, about two weeks before city leaders unveiled details of a separate measure to reform San Francisco’s business tax structure for a post-pandemic reality.
Here’s what the transit backers didn’t realize: The major tax reform measure, backed by Mayor London Breed, Board of Supervisors president Aaron Peskin, the city’s top financial officials, and others, contains poison-pill language that could kill their smaller measure.
The larger measure states that if another measure on the ballot “imposes, amends, or repeals” a gross receipts tax, the two measures would conflict. If the business tax measure gains more votes, the other measure would be “null and void.”
In other words, the ComMUNIty Transit Act doesn’t just need a majority of votes to win, it must outgain the reform measure. “It’s definitely a challenge because it raises the threshold from 50 percent to win to, essentially, a mystery percent,” said Arvin, who mainly wrote the proposal. “We don’t actually know how much we’ll need to win, because we don’t know what support that other measure will have.”
(The larger tax reform measure will still pass if it gains a majority, Arvin said, even if the transit tax wins more votes.)
Neither measure has gathered the requisite 10,000 signatures needed to qualify for the November election ballot. If both end up qualifying and the business tax’s language remains, then the Department of Elections would include a statement in the voter guide about the conflict, according to director John Arntz.
$30,000 of their own money
Arvin, a designer, mapmaker, and transit advocate who uses they/them pronouns, said transit advocates had been brainstorming ideas to fund transit for months, but they only started working on the ride-hailing tax at the beginning of March. Meanwhile, momentum had already started to build for the larger tax overhaul; in early February the city’s top financial officials, spurred by a request from Breed and Peskin, released a set of recommendations.
Arvin said they briefed the mayor’s office and Peskin before submitting their own measure, but acknowledged it came late in the process.
It’s unclear how substantial the briefing was, or how much conversation took place between the two sides. It’s also unclear if the poison-pill clause was already in the larger measure at that point, or if it was inserted after Arvin and their team submitted their measure to the Department of Elections.
It would be incredibly disappointing to get lots of people amped up, pass 50 percent, and still end up effectively defeated because of this clause.
cyrus hall, one of the main backers of the community transit act.
Arvin told The Frisc that changing the measure now would be too onerous and jeopardize the progress the campaign has already made. Of the $108,000 raised, mostly from core backers, Arvin has donated $15,000 of their own money, and Hall has donated $15,025. They say they’re mainly using the funds for a signature-gathering push that so far has attracted 100 volunteers.
“It would be incredibly disappointing to have done a mass volunteer signature-gathering campaign, to get lots of people amped up for a ballot measure that they believe in … [to] pass 50 percent, and still end up effectively defeated because of this clause,” Hall said.
Asked if the campaign, now effectively facing ballot competition, would hire a consultant for advice, Arvin said not at this time. They described the campaign as “bootstrapped.”
Even if the effort fails, Hall sees potential to influence the funding measure coming down the line. Sen. Wiener, who was SF’s District 8 supervisor before his 2018 election to the state Senate, and Sen. Aisha Wahab, who represents in Silicon Valley, are working to put a regional measure on the November 2026 ballot to provide a sustainable funding source for Bay Area transit agencies.
While the bill still needs approval from state lawmakers to reach the ballot, it could generate at least $750 million per year from sales, payroll, and parcel taxes. “That measure isn’t guaranteed to pass,” Hall said. “However, if it gets to the ballot, there’s going to have to be a bunch of people ready to get out there and build support.”
Meanwhile, Arvin said their campaign will continue to gather signatures: “We are just people who love transit and the community and want to fund it.”
Correction, 5/27/24: This story has been updated with a new fundraising total and changed to reflect that Chris Arvin and Cyrus Hall are two main backers of the transit act, but not the only two.