California weighs new taxes to bail out Bay Area transit

Transit operators in San Francisco's Bay Area are facing massive budget shortfalls as ridership lingers well below its prepandemic levels. Two California senators will unveil a bill Monday aimed at plugging those gaps, as well as bringing some order to the 27 different agencies operating across the region.

The proposal seeks at least $750 million to be doled out to public transport systems that serve the region's nearly eight million residents. The legislation would dedicate a consistent stream of revenue by asking voters to approve a new tax on sales, regional payrolls or properties. A charge on vehicle registrations would also be considered, according to a fact-sheet describing the legislation. The bill also asks the California State Transportation Agency to study combining the more than two-dozen networks.  

"We need these systems to be not just what they were before the pandemic, but even better and more modernized and more integrated and more reliable," said State Senator Scott Wiener, one of the authors on the bill. "We've never funded these systems the way they need to be funded."

A Bay Area Rapid Transit (BART) train station in Oakland, California
A Bay Area Rapid Transit (BART) train station in Oakland, California
David Paul Morris/Photographer: David Paul Morris/

The Bay Area's many transport agencies, like systems across the US, are facing imminent budget gaps as pandemic aid dries up and they struggle to recapture 2019 ridership levels. The rebound has been slow as many workers are returning to the office only part-time, leaving the fate of transport agencies looking to shore up their balance sheets in the hands of tax-leery voters. 

"Tax sensitivity in the Bay Area today is higher than it's ever been," according to Rebecca Long, director of legislation and public affairs for the Metropolitan Transportation Commission, which sponsored the bill. "But at the same time voters strongly value public transit and other improvements and most agree it needs more investment."

In an October poll from the planning and financing agency for the nine-county San Francisco Bay Area, about 57% of voters surveyed said they were supportive of long-term funding for public transit, even if it meant raising taxes — the rest were opposed. But the proposed bill, which would only benefit agencies in the Bay Area, must make its way past state legislators before it even gets in front of voters.

The lawmakers are targeting a vote on the ballot measure in 2026. Absent a bill, budget planners will be left hanging as agencies' fiscal cliffs grow closer. 

The San Francisco Municipal Transportation Agency, the overseer of the city's main public transit system, is staring down a $12.7 million budget gap for upcoming fiscal years. The operator of the Bay Area Rapid Transit District, the commuter rail more commonly known as BART, faces a projected deficit of $300 million after fiscal 2026 when the agency uses up the last of its federal aid and stop-gap funds from last year's $3.1 billion transit bailout from the state. 

Stronger oversight and more coordination across the system are also among the bill's goals.

"Nobody wants to say there's too many chefs in the kitchen but clearly that's the case when you have 27 agencies in the nine Bay Area counties to basically provide the same service which is transportation," said Senator Aisha Wahab, who along with Wiener, helped author the bill. 

San Francisco is not alone. Across the U.S., states have had to step in to bolster their transit systems. New York Governor Kathy Hochul created a plan to help dig the MTA out of its financial hole with additional tax revenue while New Jersey Governor Phil Murphy is proposing a corporate transit fee to support its transit operator. 

Bloomberg News
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