Why Bay Area transit rescue plan is on hold

SACRAMENTO, Calif. - A long-term fix for Bay Area transit agencies' budget woes is on pause, after the proposal's authors announced last week they would try to resolve disagreements between agencies and other stakeholders within the region before bringing the bill back.  

Senate Bill 1031 by Democratic Sens. Scott Wiener of San Francisco and Aisha Wahab of Fremont authorized a Bay Area ballot measure in 2026 or later to help raise revenue for transit agencies. It also required a study of whether it makes sense to consolidate the more than two dozen transit agencies that serve the nine-county region.

The Bay Area has been a focus of the financial troubles facing many public transit agencies across California, which have struggled to bring riders back after the COVID pandemic. But funding efforts have been beset by disagreements over how money is collected and distributed. While BART says it supported the bill, agencies including VTA in Santa Clara County and SamTrans in San Mateo County opposed the bill. 

Wiener and Wahab -- along with the Metropolitan Transportation Commission, which sponsored the bill -- "decided a reset is needed to allow further stakeholder engagement to occur this summer and early fall," the senators wrote in a statement. 

They plan to come up with a bill that would earn broad enough regional support to win over the Legislature next year and voters in 2026.

This delay is the latest setback: Wiener's prior bill to temporarily increase tolls on Bay Area bridges to help fund transit was paused last year, and Wahab pulled her prior bill to develop a consolidation plan shortly after its introduction in January. Wiener and Wahab's efforts were paired at the recommendation of Senate President Pro Tem Mike McGuire. 

Last year, the Legislature and Gov. Gavin Newsom gave transit agencies a $5 billion lifeline to cover operating shortfalls and avoid service cuts for riders. But they have agreed to delay at least $1 billion in future funding due to the state's projected budget deficit, though negotiations will continue until June 30. 

That funding delayed the "fiscal cliff" transit agencies face, but this bill was intended as a long-term solution for the Bay Area.

"We don't want to be in a situation where we're continually having to go back to the Legislature for operating money," Wiener told CalMatters. "It's better to solve it ourselves at the regional level and not have to continually do triage through the state budget." 

The bill passed the Senate last week ahead of a key deadline -- but not without some stern opposition from other Bay Area lawmakers.

On the Senate floor, Sen. Dave Cortese, a Democrat from Campbell, said he opposed the bill because it failed to address potentially unequal distribution of funds. Currently, the bill states that 70% of revenue from a half-cent tax increase -- likely in sales taxes -- would be returned to the counties it came from for the first five years, and 90% after that. The Bay Area Council and other business groups opposed an increase in payroll taxes. 

But practically speaking, of the $1.5 billion that the bill aims to bring in annually for up to 30 years (Cortese expects it'd be closer to $1 billion a year), a majority would likely go to BART, and some to CalTrain -- leaving a smaller portion to divvy up among seven counties; Sonoma and Marin counties were exempted from the measure.

"What keeps coming back to kind of haunt the bill ...  is there's not enough money in a half cent sales tax to do all the things that they're trying to do with the bill," he said. 

Cortese also said the bill lacks a blueprint for how funds would be spent, which is historically how transit funding plans have been executed.

"Most of us are sympathetic to some kind of short-term bailout for BART, particularly, because it really is multi-county, it interacts with so much of the Bay Area and perhaps MUNI should be supported. And perhaps it would be convenient to deal with Caltrain while we're at it," he said. "But it has to be a plan that doesn't just raid certain sales tax-wealthy counties to subsidize entities that are bleeding red ink right now."

Cortese also noted that while the authors acknowledged the concerns and pledged to work them out, the bill was held for good reason.

"I hope we're done for this year in terms of trying to jam a bill through in the 2024 session, but I'm absolutely willing and committed to working closely with Senator Weiner and anyone else, including the pro tem, who wants to keep working on a better solution."

The bill was supported by groups including pro-housing advocacy group California YIMBY and Climate Action California, but opposed by more than two dozen organizations, including the California Chamber of Commerce and the Howard Jarvis Taxpayers Association, as well as transit agencies, some of whom took issue with the prospect of consolidation. 

In hearings, local government and taxpayer groups expressed concern about the power the bill would give the Metropolitan Transportation Commission to divide up the money. 

And some legislators expressed concern last year about giving transit agencies more money, especially after reports of mismanagement at BART. In one case, the agency spent $350,000 on homeless outreach and only helped one person. 

Since last year, there have been a number of efforts to increase accountability for transit spending.The Legislature and governor created a Transit Transformation Task Force, which meets every two months to develop recommendations to increase ridership and improve the rider experience. 

Some transit agencies have seen more success than others in getting riders to return. Some bus agencies changed routes to fit new commuting patterns, but that's not possible for a rail system like BART, which also relies heavily on passenger fares to pay operating costs. It and other agencies have tried to reduce fare evasion, tweaked schedules and deployed crisis intervention teams to address mental health crises on trains.