A proposal for a one-eighth cent sales tax levied on transactions within the three counties served by Caltrain — San Francisco, Santa Clara and San Mateo — has transformed into a days-long proxy debate over local control and the prioritization of public transportation.
The rail system, which normally carries around 60,000 passengers up and down the Peninsula daily, is operated and managed by San Mateo County’s transit agency. The two share leadership and staff, media contacts and legal counsel, among other key operational elements.
However, nearly 80% of the proposed sales tax revenue is projected to be generated from San Francisco and Santa Clara counties, which have representatives on a joint powers board. Despite paying to fund the agency, the two exact relatively little control over its functions, say those who have called for reform.
San Francisco Supervisors Shamann Walton, Aaron Peskin and Matt Haney introduced a resolution at the Board of Supervisors meeting Tuesday that they say funds Caltrain while still providing a pathway to resolving governance concerns.
Under this plan, created in collaboration with Santa Clara county leadership, the one-eighth cent sales tax would be put to voters on the ballot in November. If passed, governance reforms would need to be advanced simultaneously “to ensure that we have the ability to directly oversee the use of funds and truly shape and set policy in an equitable manner.”
The first $40 million — out of a projected $100 million — in sales-tax generated revenues would be directed towards funding essential Caltrain operations. The remainder would be kept in an escrow account that could only be spent on Caltrain expenditures when approved by a two-thirds supermajority of the agency’s governing body.
At the same time, the Joint Powers Board would “work toward a consensus on organizational structure and accountability reform,” with the escrow account being closed and its funds transferred once an agreement was achieved.
If no compromise is reached by September 30, 2021, another $40 million in operating funds would be released from the escrow account. If the stalemate continues until December 31, 2022, the counties would turn to the state legislative delegations for help.
After its introduction in San Francisco, the legislation is likely to be voted on next week in front of a “committee of the whole,” a procedural exception whereby the legislation would skip committee and instead be discussed and voted on by the entire board within the same meeting, Haney said.
The urgency is due to an Aug. 7 deadline to get something on the November ballot.
Both counties called on San Mateo County to join their resolution.
The sales tax appeared dead on arrival after last week’s San Francisco Board of Supervisors meeting, when Peskin and Walton declined to refer the measure to committee. They later blamed unequal regional influence over key Caltrain decisions as the primary reason they couldn’t support a sales tax measure without governance reform.
It was the last opportunity before the ballot deadline under normal procedural rules, and it caused a maelstrom of public debate that embroiled advocates and policymakers alike.
“It’s important to get the measure on the ballot to have an ongoing service that we can decide about the best way to govern,” local transit advocate and co-founder of Friends of Caltrain Adina Levin said of the last-minute attempt to attach governance reform to a funding scheme.
Caltrain’s current funding is fickle, with about 70% of its annual revenue comes from the farebox. The remainder comes from equal contributions from each of the three counties, but how much they provide can change on an annual basis. Ridership has dropped 95% since the start of shelter-in-place, gutting the rail’s budget and jeopardizing its continued service.
Those in favor of the original sales tax measure say it will rescue the rail network from its doomsday financial forecast and give it the long-overdue dedicated funding source it needs to achieve independence and stability. It would also relieve partner transit agencies of their annual contributions, freeing up funds in their strapped budgets.
Though many agree reforming its governance structure is a necessary undertaking, they say it must come second to ensuring Caltrain’s survival.
To get on November’s ballot, the measure must be approved by the boards of supervisors and transit agencies in San Mateo, Santa Clara and San Francisco counties.
It may meet opposition, however. A number of federal, state and local legislators representing the Peninsula issued a joint statement Sunday calling for the sales tax to be placed on November’s ballot free of any governance conditions.
And even if the measure makes it to the ballot, it will require the support of a two-thirds majority vote in November.