Late last night, California lawmakers and Gov. Gavin Newsom finished their annual race to complete the state budget, and it was a stomach-turning ride for public transit officials, advocates, and riders.
An earlier draft from Newsom’s team cut billions of dollars from local transit systems, sparking fears of a “fiscal cliff,” especially here in the Bay Area. SF Municipal Transportation Agency, BART, and Caltrain ridership has been crushed by a lack of commuters to downtown SF, where office vacancy just hit a record high.
Last night’s budget agreement provides $5.1 billion for systems across the state over four years. The figure represents only $1.1 billion in new money. The rest is clawed back from the cuts proposed earlier. Some state officials, including SF’s Assemblymember Phil Ting, complicated negotiations with demands for more accountability from transit agencies.
The money is to be shared across the state, and it won’t be enough. On its own, Muni has an annual operating budget of more than $1 billion, which is why SF’s state senator Scott Wiener is proposing another lifeline. He and other officials announced Monday a bill to raise tolls on seven state-owned bridges by $1.50 over the next five years. (But not the Golden Gate Bridge.)
The Safe, Clean, and Reliable Public Transportation Emergency Act, SB 532, would generate $180 million annually for Bay Area transit systems and sunset at the end of 2028.
If the bill passes, Muni could avoid drastic service cuts while trying to devise new ways to generate operating funds. Downtown commuters, who tend to pay full freight, are in short supply, which means fares won’t be a viable source for the foreseeable future.
[Update: Wiener announced Aug. 21 he would “pause” the toll hike proposal, citing the need for support from Bay Area lawmakers who believe the region’s transit agencies share some responsibility for their financial woes. Wiener did not give a timeline for a new measure but indicated it would likely include a more diverse set of funding sources beyond tolls.]
With federal COVID funds soon to run out, Sen. Wiener has spent much of the past year pushing the governor’s team for more transit money. They reached a legislative compromise on June 11 to allocate $1.1 billion from the state’s cap-and-trade program, which taxes greenhouse gas emitters for the carbon dioxide they release. By law, these funds must go toward capital improvements for greenhouse gas reduction — like the purchase of electric buses — but the budget bill lets agencies shift the money to operations.
“There is not much point to running electric buses if you don’t have a transit system,” James Pew, a climate policy fellow with NextGen California, told CalMatters.
It’s still unclear what portion of the cap-and-trade funds will come to Muni, which projects growing deficits in coming years, starting with $110 million in 2025. SFMTA executive director Jeffrey Tumlin estimated at a June 20 meeting that the cap-and-trade funds would only cover about one-third of what’s needed to avoid massive service cuts.
Still, the agency has indefinitely suspended any additional service restorations, Tumlin added: “We have to keep a tight hand on the hiring throttle — only the most critical positions.”
For now, Muni is counting on the SF general fund for about 40 percent of operations, but the city is facing a crunch of its own. Empty offices and a shrinking retail sector downtown could blow a huge hole in the city’s coffers. That’s why Wiener and other Bay Area legislators are making the case for the increased bridge toll. “It’s now up to the region to engage in budgetary self-help,” Wiener said yesterday.
But last night’s budget deal and a potential toll increase still won’t make the long-term math work.
Getting back to black
The pandemic exposed and exacerbated systemic shortcomings in many areas, with public transportation funding one of the most severe.
Muni’s major weakness proved to be over-reliance on passenger fares, particularly from daily commuters into downtown SF. Transit fares and parking fees and fines made up roughly half of the agency’s revenue pre-COVID. When shelter-in-place orders happened, transit services like Muni and BART lost 90 percent or more of their ridership.
Today, fares and parking fees and fines make up less than one-third of SFMTA’s revenues. (The Board of Supervisors recently delayed a plan to extend parking meter hours across the city, which would bring in an estimated $15 million a year — the equivalent of three Muni lines.) Ridership is currently 66 percent of 2019 levels, much of it boosted by students who ride for free.
The agency has adjusted by moving service where it’s needed most. This summer, nonschool routes like the 1 California and 38R Geary will get boosts to address crowding. Tumlin pledged at the June 20 meeting that school routes will get additional service to get students to class on time.
Beyond parking meters, the agency might also ask voters to approve a bond on the November 2026 ballot, which would need to be placed there by the Board of Supervisors, according to SFMTA spokesperson Stephen Chun.
There could also be a region-wide funding measure on that year’s ballot. The Metropolitan Transportation Commission (MTC) — the entity that coordinates and funds transit across the Bay Area — is at work on surveys and research to decide if the funding mechanism would be a tax or a bond.
Muni and its agency peers are depending on two big future “if”s. If funding measures make it to the ballot, and if voters pass them, the money generated still wouldn’t be available until late 2027 or 2028.
That’s why Wiener’s proposed bridge toll is, well, a crucial bridge. If enacted, the tolls would begin generating revenue next January, bringing in $180 million each year until the end of 2028. The bill requires at least 90 percent of the revenues to maintain current service levels. The remaining funds would be dedicated to boosting service levels or improving safety, cleanliness, and security.
Transit agencies seem to be receiving the message for more accountability loud and clear. “We are focusing on safety, cleanliness, and efficiency,” said BART spokesman Rod Lee at a recent panel discussion on the Bay Area’s transit future.
And when Muni officials presented a series of community surveys to the SFMTA board last month, reliability and personal safety came up time and again as top rider priorities.
[Update, 6/28/23: SFMTA spokesperson Steven Chun confirmed that the agency will put a $300 million capital improvement bond on the November 2026 ballot. This would be separate from a regional bond, and the money would not be available to fund daily operations.
Chun did not address specific accountability requirements in the new state funding or proposed bridge tolls. More generally, however, Chun said the new Muni data site provides metrics that MTC says are relevant to its decisions when disbursing regional funds. Sebastian Petty, transportation policy manager at local think tank and policy advocate SPUR, told The Frisc earlier this month that “SFMTA is ahead of the game on many of these proposed accountability requirements.”]
As for people unlikely to board a bus, train, or ferry and who fume about extra costs, Wiener addressed them with a dire picture of failing transit: “Even if you never take public transit, you’ll find bridges harder to cross and freeways congested because many more will be forced to drive who otherwise wouldn’t. This is so important for our future.”
Kristi Coale covers streets, transit and more for The Frisc.
