A dispute over the governance of Caltrain has threatened negotiations over a proposed sales tax to fund the transit agency.. (Kevin N. Hume/S.F. Examiner)

Caltrain tax measure appears to be back on track

The Santa Clara County Board of Supervisors on Tuesday unanimously voted to approve putting an eighth-cent sales tax on the November ballot to fund Caltrain, the latest development in a contentious regional debate over the future of the transit agency.

San Francisco’s Board of Supervisors last week passed a resolution to support the sales tax measure but with conditions involving a change in Caltrain’s governance structure, a move that drew rebukes from officials in San Mateo County.

Santa Clara, San Mateo and San Francisco are the three counties involved in the measure’s negotiations. In addition to approving putting the measure on the ballot, the Santa Clara County supervisors approved a separate resolution committing Caltrain to reform its governance structure.

“There have been disagreements between a number of leaders and counties on this item in part because there was a concern in the ability to address governance and other issues structural to Caltrain,” Santa Clara County Board of Supervisors President Cindy Chavez said.

Among the changes proposed to the agency would be having Caltrain get its own attorney and auditor, separate from the San Mateo County Transit District, which currently runs Caltrain. There is also a timeline for the agency’s Joint Powers Board, which is made up of representatives from San Francisco, Santa Clara and San Mateo counties, to make recommendations regarding the structure of governance.

Another major component is that tax revenues are held in escrow until the governance structure is changed. The proposed sales tax ballot measure is estimated to yield about $108 million a year for the rail agency’s survival through its pandemic-driven financial crisis.

The regional COVID-19 shelter-in-place orders decreased daily ridership from 65,000 people to 1,500 people at the lowest point, significantly impacting Caltrain’s revenue stream.

To save on operational costs, Caltrain temporarily reduced its weekday schedule from 92 trains to 42 trains daily. Now it is back up to 70 trains per day with an average of 3,200 daily riders, according to the San Mateo County Economic Development Association.

Ridership revenue makes up 70 percent of Caltrain’s funding. If the measure were to be passed by voters, the sales tax would become the rail agency’s main source of capital. Chavez said it is essential to fund Caltrain for climate protection and traffic mitigation.

At its peak, residents of Santa Clara County make up 41 percent of Caltrain riders, according to Caltrain research. The tax is a regressive one, meaning it levies the same percentage on products regardless of a person’s income, so everyone pays the same.

“Because it’s regressive, I think we have a higher obligation to ensure that the money is used in a transparent and clear way that every voter in our county will understand how it’s being spent,” Chavez said.

Before going to voters, the measure will need to be reconsidered by the San Francisco Municipal Transportation Agency Board of Directors at its meeting Wednesday after the board voted it down last week. The Santa Clara County Valley Transportation Authority board and the Joint Powers Board will vote at their respective meetings on Thursday.

The San Francisco Board of Supervisors will also be meeting on Friday to vote on the revised measure. The San Mateo County Board of Supervisors previously approved the measure.

San Jose Mayor Sam Liccardo, who sits on the VTA board, said the agreement to enable the Caltrain measure to move forward “was forged as a result of many hours of phone calls, shuttle diplomacy, and redrafting by several of us through nights and weekends.”

“I’m grateful that we have been able to reach an outcome that will enable Caltrain to expand its service with long-overdue reforms in governance that will enable greater accountability to taxpayers,” Liccardo said.

It must be approved by each county’s board of supervisors, each county’s transit agency and the Joint Powers Board by Friday so that it is placed on the November ballot. If it is passed by two-thirds of voters in the upcoming election, tax collection for the rail agency will begin in April 2021.

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