Muni to offer voters a slew of new taxes

Voters may be asked in November to approve any number of higher taxes — sales, hotel, payroll — to prop up the strapped-for-cash Municipal Transportation Agency.

The San Francisco agency that operates Muni just made it more expensive to ride the transit system while it reduced service — making buses more crowded and less frequent.

More service reductions are likely if Muni does not see an infusion of money, the agency says. “Without additional revenues, the SFMTA financial challenges will worsen, resulting in a smaller, more expensive and less effective transportation system,” said an agency report for the San Francisco Municipal Transportation Agency’s Board of Directors.

The board meets Tuesday to vote on whether to pursue tax measures for the November ballot and, if so, which of the six proposed tax increases to push during these challenging economic times. The report finds nearly all the options would be difficult to pass.

The agency could gain as much as $65 million annually if voters approve a half-cent sales tax. But sales taxes are often criticized for being “regressive.” One measure would increase the payroll tax from 1.50 percent to 1.75 percent to generate as much as $60 million a year, but there is a movement afoot by city leaders to do away with the payroll tax, which has long been criticized by business advocates as a disincentive to hire workers.

The one option that is considered “easier,” or perhaps most realistic, is increasing the hotel tax.

“It might be easier to approve a hotel tax because it would mostly be paid by tourists,” the report said. “The hotel tax might have a small impact on the tourism industry (the tax increase on a $150-per-night [base rate] room would be $3.)” This tax increase would generate $20 million annually.

Without new revenue, the agency says the system’s operations will struggle. “The SFMTA will continue to face long-term financial uncertainty without new revenue sources. In turn, this will undermine the SFMTA’s ability to keep fares in line with inflation and provide frequent and comprehensive public transportation.”

As the agency looks to higher taxes for revenue, at least two city commissioned reports have been issued recently calling into question the agency’s operations and identifying millions of dollars in savings if specific improvements were made. Also, the Muni operators have come under attack for not giving up some part of compensation to help with the funding shortfall.

Budget analyst Harvey Rose’s audit released last week found factors like use of overtime pay and poor scheduling and management of operators is wasting more than $3 million a year. The agency plans to release a full response to the audit by Tuesday.

Some of the operational challenges are blamed on work rules. At least one measure is headed for the November ballot that, if approved, would eliminate work rules blamed for excessive overtime costs.

Muni’s budget for the fiscal year that begins July 1 remains under threat by members of the Board of Supervisors who are unhappy with the 10 percent service cuts that went into effect May 8.

Those cuts eliminated more than 300,000 hours of annual service “which includes changes that will increase crowding and reduce service hours and frequency, particularly during the evenings and weekends,” said the agency’s report.

Members of the Board of Supervisors say they may be forced to reject the budget if the cuts are not scaled back. Negotiations continue.

The Board of Supervisors Budget and Finance Committee will hold a hearing on Muni’s operations on Thursday that will include a discussion about the agency’s response to the budget analyst’s audit.   

Taxing considerations

Possible sources of additional transit funding per year:

Sales tax    
Description: Another .5%    
Revenue potential: $65.0M

Vehicle license fee
Description: From 1.15% to 2.00%
Revenue potential: $33.0M

Parcel tax
Description: $198
Revenue potential: $28.0M

Payroll tax

Description: 1.50% to 1.75%
Revenue potential: $57.5M

Hotel tax
Description: 14% to 16%
Revenue potential: $20.0M

Parking tax
Description: 25% to 35%
Revenue potential: $20.4M

Source: SFMTA

Bay Area NewsGovernment & PoliticsLocalPolitics

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at

Just Posted

Police seized ghost guns and other firearm manufacturing items while executing a warrant in February (Courtesy SFPD)
Ghost guns linked to rise in SF shootings as numbers jump

San Francisco police are seizing an increasingly alarming number of untraceable firearms,… Continue reading

San Francisco Giants pitcher Gregory Santos (78) makes his major league debut against the Marlins in the 6th inning at Oracle Park on April 22, 2021 in San Francisco, California. (Photography by Chris Victorio | Special to the S.F. Examiner).
Giants post fifth shutout of 2021, all caught by Casali

After going the entirety of 2020 without shutting out an opponent, the… Continue reading

Shock G of Digital Underground performs during the BET Hip Hop Awards '10 at Boisfeuillet Jones Atlanta Civic Center on October 2, 2010, in Atlanta. (Taylor Hill/Getty Images/TNS)
Rapper Shock G of Digital Underground found dead in Tampa

Rapper Shock G, who was famous for the hit single “The Humpty… Continue reading

Students walk around campus near the Cesar Chavez Student Center at San Francisco State University. (Steven Ho/Special to S.F. Examiner)
California’s massive UC and Cal State systems plan to require COVID-19 vaccinations this fall

Nina Agrawal, Teresa Watanabe, Colleen Shalby Los Angeles Times The University of… Continue reading

From left, Esther Gulick, Sylvia McLaughlin and Kay Kerr started launched one of the country’s first environmental movements. (Courtesy Save The Bay)
Sixty years of Saving San Francisco Bay

Pioneering environmental group was started by three ladies on a mission

Most Read