Proposition K, approved by voters in 2003, provides funding primarily for traffic safety and transit capital projects and investment. (Courtesy SFMTA Photos)

Proposition K, approved by voters in 2003, provides funding primarily for traffic safety and transit capital projects and investment. (Courtesy SFMTA Photos)

City likely to seek reauthorization of transit sales tax in 2022

Measure to fund emerging priorities such as traffic safety, COVID-19 recovery and Muni train control

Voters in San Francisco could see a half-cent sales tax measure on the ballot in 2022 predominantly designed to fund transit capital projects and provide a predictable source of revenue to the beleaguered budgets of The City’s transportation network.

Residents already pay a sales tax of the same amount to fund local transportation capital investment, a result of Proposition K, a measure that was passed with 75 percent of voter approval in 2003.

Any measure on the ballot in 2022, if passed, would simply supersede Prop. K. Residents would not see a higher sales tax bill as a result.

The San Francisco County Transportation Authority oversees the allocation of the funds currently generated through Prop K. As such, the supervisors who sit on the board would also be responsible for crafting the new measure and meting out its revenue.

When voters approved Prop. K in 2003, they also approved a 30-year expenditure plan to use the estimated $2.35 billion, an opportunity they would be given again with any measure.

Since then, the bulk of the money has been used to fund capital investments across BART, Caltrain and the San Francisco Municipal Transportation Agency including the acquisition of new vehicles, facility upgrades, bus rapid transit efforts and other major endeavors, according to a staff report.

Of the remaining money generated, about 25 percent has been used to improve street and traffic safety through the use of signal upgrades, traffic calming and street resurfacing and nearly 9 percent has gone to fund paratransit operations.

Notably missing from the spending scheme is SFMTA train and bus operations, which have seen massive service cuts and the threat of widespread layoffs due to a staggering budget deficit resulting from the stay-at-home order.

Tilly Chang, executive director of the CTA, acknowledged the discrepancy and said any measure’s expenditure plan could provide a chance to re-prioritize.

Additionally, SFMTA leadership has, in recent board meetings, dangled the idea of creating another revenue measure to put on the ballot in the next election cycle to generate stable funding for operations independent of the farebox, a discussion that’s likely to come up at the Feb. 2 Board of Directors budget workshop.

Staff explained to supervisors on Tuesday that giving voters the chance to approve a new expenditure plan would allow the CTA to invest in new local priorities that weren’t emphasized nearly 20 years ago, such as updates to Muni’s train control system, extensive signal upgrades and COVID-19 recovery.

Additionally, many of the capital projects the CTA set out to fund with Prop. K dollars years ago have already been delivered, and those that remain are running out of money.

Chang emphasized that local sales tax funding for transportation makes it easier for The City to apply for financial matches from the state and federal authorities, adding the new presidential administration under the transit-friendly Joe Biden has already expressed interest in supporting such efforts.

“The big picture is that we have a lot of need,” she said of the importance of achieving a stable funding source for local transportation agencies who have watched farebox revenues dwindle as a result of the coronavirus pandemic.

Chair Rafael Mandelman and Supervisor Myrna Melgar both raised some concern that sales taxes are widely considered regressive and could disproportionately impact some of San Francisco’s communities most in need.

Though neither expressed outright disapproval for the idea of reauthorizing the transportation sales tax, they did speak to the need to carefully mitigate the harm it could cause to some populations as well as diversify local funding sources for transit.

“We want to acknowledge the sales tax has regressive aspects, but it’s also a large, reliable funding source that we can continue to use to advance equity,” staff told the supervisors, pointing to CTA’s plan to conduct targeted outreach towards the most vulnerable pockets of The City in multiple languages and formats to maximize accessibility.

CTA hopes to get the measure on the ballot by June 2022.

Next steps include community engagement through the fall of 2021, a public opinion survey and board discussions to settle on an expenditure plan for approval by the end of the year before formalizing the measure on the ballot.

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