Facing mammoth budget deficits for 20 years to come, the San Francisco Municipal Transportation Agency may ask city voters to increase vehicle registration fees, raise parcel and sales taxes, hike off-street parking rates or create a new “transportation utility fee.”
With salaries and benefits growing faster than agency revenues, the SFMTA must generate an extra $50 million each year, while also reducing annual expenditures by $30 million, according to Chief Financial Officer Sonali Bose.
Agency officials are investigating five revenue initiatives, one or more of which they plan to take before voters in November 2012.
One would charge motorists an extra $50 to $150 to register their vehicles, an initiative that would generate from $24 million to $72 million a year for the SFMTA. The agency is billing the proposal as a “vehicle mitigation impact fee.”
A second option would charge each San Francisco household $60 to $180 a year for a “transportation utility fee,” with the idea that public transit is just like other fee-based utility services. That measure could bring $26 million to $74 million.
Other plans include a parcel tax measure, a fee hike for off-street commercial parking locations, and an increase to The City’s sales tax.
To make the November 2012 ballot, the SFMTA would have to approve its preferred revenue initiatives by August 2011, agency officials say. The SFMTA projects realizing revenue from these measures by the 2013-14 fiscal year.
“We looked at initiatives that showed the best return in terms of revenue generation, while also keeping in mind the political chances of their success,” said Nathaniel Ford, executive director of the SFMTA.
But Jim Lazarus, public policy director of the San Francisco Chamber of Commerce, believes the odds of success are slim, as any measure directing specific funding toward the SFMTA must get two-thirds majority approval from local voters.
“I really don’t think a special tax for Muni is going to fly when you’re talking about a two-thirds majority,” he said.
While the agency advanced specific revenue proposals, it was noticeably less forthcoming with its plans to trim $30 million in annual spending. Ford noted that salaries and benefits make up 70 percent of the agency’s total costs, but said he wasn’t ready to detail how the agency could reduce its costs.
Rafael Cabrera, president of the Transport Workers Union Local 250-A, which is now negotiating with the SFMTA, also wouldn’t say where the $30 million should come from. “That’s up to them,” he said.
The proposals also would enable the SFMTA to issue bonds for long-term projects, Ford said. The SFMTA hopes to issue $150 million in bonds over that period, Ford said, but without stable finances, it would be difficult to find buyers.
How many votes revenue boosts will need is hazy
To raise $50 million in additional revenue each year, the San Francisco Municipal Transportation Agency would have to convince a lot of residents to support at least one ballot initiative. But just how many votes they would need remains unclear.
If the SFMTA’s board of directors asks voters to direct revenue specifically to the agency, that ballot measure would need to pass with a two-thirds approval from voters.
Yet the agency could instead ask the Board of Supervisors to put the measure on the ballot, which might then only need a simple majority to pass, according to SFMTA Chief Financial Officer Sonali Bose.
Although revenue from such an initiative would go toward The City’s general fund, the Board of Supervisors could decide later to direct a certain percentage toward the SFMTA, Bose said.
What is unknown is the potential impact of November’s statewide approval of Proposition 26. That measure stipulates that any new fees or taxes must be approved by a two-thirds majority. Statewide and locally, there is still widespread uncertainty about how, if and when that measure will be applied.
“There is a possibility that Prop. 26 will require two-thirds passage for these measures,” SFMTA Executive Director Nathaniel Ford said. “That’s what we’ve got our government affairs and legal people looking into.”
Brainstorming budget solutions
Here are five possible ballot initiatives under consideration:
Option 1: Vehicle impact mitigation fee
$50 to $150 tacked on to vehicle registration costs
Estimated annual revenue: $24 million to $72 million
Option 2: Transportation utility fee
$60 to $180 annual fee for each single-family household in San Francisco
Estimated annual revenue: $26 million to $74 million
Option 3: Parcel tax for transit purposes
$100 to $200 per parcel fee for commercial, residential and industrial parcels
Estimated annual revenue: $20 million to $39 million
Option 4: Off-street commercial parking stall fees
$100 to $300 annual fee per free commercial parking space
Estimated annual revenue: $6 million to $17 million
Option 5: Local transportation sales tax
An increase to local sales tax
Estimated annual revenue: $17 million per every one-eighth-cent increase