The Green Caltrain blog is sponsored by BayRail Alliance, an all-volunteer non-profit organization supporting green rail transit in the Bay Area. This blog and BayRail have no affiliation with Caltrain.Options Identified to Stabilize Caltrain Funding
To avoid the roller coaster of periodic financial emergencies, Caltrain needs a stable source of operating funding. There are a variety of ways to potentially pay for Caltrain operations. This year, the Silicon Valley Leadership Group, an organization of business leaders, held a series of forums bringing together leaders and residents to brainstorm funding options. The Leadership Group then hired a consultant to review the revenue potential of the various choices.
Why does Caltrain need funding, and how much does it need?
Caltrain currently gets nearly half of its revenue from riders, which is comparable to some of the best known, most heavily used commuter transit systems in the US such as New Jersey Transit and Long Island Railroad. This leaves nearly half of its operating budget to come from public funding. Public funding for transit is the norm in the US, and in Europe as well.
Sources of Caltrain Operating Funding (graph from Caltrain)
Other major transit services in the Bay Area have dedicated funding sources. For example, VTA and SamTrans are funded by sales taxes, and BART is funded by a combination of sales and property taxes. But Caltrain is unique in having minimal dedicated funding. The largest amount of Caltrain’s public funding – 25 – 30% of its budget – comes from a consortium of three transit agencies in Santa Clara, San Mateo, and San Francisco Counties. When any of these services has financial trouble, they prioritize their own directly run services, reducing their contribution to Caltrain. This leaves Caltrain on a roller coaster ride, often needing to cobble together emergency funding.
More Information and Analysis on Funding Options for Caltrain
Based on the Leadership Group’s financial analysis, and additional analysis from Friends of Caltrain, Friends of Caltrain has summarized the major options to pay for Caltrain, as well as additional funding options that would not fully cover the need.
Major public funding options
According to the Leadership Group analysis, the major potential sources of funding include sales tax, parcel tax, gas tax, and payroll tax.
Funding option Rate Amount raised Comments/Issues
| Option | Rate | Amt raised | Comments/Issues |
| Sales Tax | 1/20 cent | 28 million | Familiar means of funding transit in the region, but regressive |
| Parcel Tax | $35 | 30 million | In 2012 a parcel tax would compete with measures to pay for schools |
| Gas Tax | 2.5 cents/gallon | $30 million | Helps discourage driving. Sensitive with high gas prices. |
| Payroll Tax | Not analyzed, but SF levies a 1.5% sales tax. | $5 – $20 million | Could be adjusted by income to be more progressive; Opposed by the Leadership Group, a major source of support for Caltrain. |
This table lists the level of tax that could cover Caltrain’s need for operating funding, if all of the money raised went to Caltrain. It might be better for voter approval if the tax went for more purposes in addition to Caltrain, such as other transit services or road repair. The leadership poll will test these possibilities. If so, a higher level would be needed. The table below shows the amount raised from different levels of tax.
| Level | Funds Raised | |
| Sales tax | 1/10 cent | $56 million |
| 1/8 cent | $70 million | |
| ¼ cent | $140 million | |
| Parcel tax | $25 | $20 million |
| $50 | $41 million | |
| $100 | $82 million | |
| Gas tax | 2.5 cents/gallon | $30 million |
| 5 cents/gallon | $60 million | |
| 10 cents/gallon | $121 million |
The consultant to the Leadership Group also reviewed the option of full highway tolling for all drivers on 101 and 280. In theory, this could raise over $20 million. But it is harder and less practical to implement than allowing single occupant drivers to use the carpool lane for a fee, which is quite practical with transponder technology. Also, tolling all drivers on 101/280 would be expected to garner major opposition and be very hard to pass.
A regional gas tax?
The Metropolitan Transportation Commission is also investigating the potential for a Bay Area regionwide gas tax to help with the financial sustainability of transit regionwide. Caltrain isn’t the only transit agency facing challenges. The state’s financial problems have cut a hole in the budget for Bay Area transit overall, and a regionwide tax would compensate. The MTC already has legislative authority to collect this tax, if it is approved by the voters. If a regionwide gas tax is on the ballot, then Caltrain funding would be included in this overall plan, instead of raising funding for Caltrain separately.
A gas tax is potentially a strong source of funding for transit and transportation. Since the money from the tax would go to relieving congestion by taking riders off the roads and improving roads, there is the most direct connection between payment and result. Also, California has aggressive goals around improving the environment and reducing carbon emissions. California’s AB32 global warming policy upheld by voters who rejected Prop 23 which would have overturned AB32. SB375 is intended to coordinate transit and land use, with the intent of reducing greenhouse gases. A tax on gas helps further these choices by discouraging the driving of polluting vehicles.
Are Bay Area voters willing to support their values with their pocketbooks?
Other public funding options – too small or too slow
There are other funding options that could help fund Caltrain operations, but do not bring in enough funding to fully cover the need, or will take longer to implement.
| Funding option | Amount raised | Comments/Issues |
| Re-examine funding split among MUNI/SamTrans/VTA to reflect current usage | $0-$5M | Could be implemented as soon as FY 2013 |
| High Occupancy Toll Lanes (tolls could be adjusted to provide congestion pricing) | $5-$20M | Don’t yet have a carpool lane in North San Mateo County; would take longer to implement |
| Vehicle license fees | $5 – $20M | Builds on existing mechanism. Requires legislative approval to allow VLF to be levied by local jurisdictions with voter approval (SB 653/Steinberg). |
| Transit passes in lieu of parking | $0-5 million | Could be adjusted by income to be more progressive |
| Vehicle Miles Traveled Fee | > $20 Million | More highly correlated with road use than gas tax as cars become more fuel efficient. But the methods to collect are immature and raise privacy issues. |
| Increase bridge tolls | $5-$20 million | Poorly correlated to Peninsula transit/transportation users |
| Sell carbon credits under AB32 | $0-$5 M | Carbon trading not yet implemented |
| Congestion pricing – San Francisco only | $0- $5M | Opposition in San Mateo County since traffic is balanced in both directions |
Caltrain marketing and service improvements
Riders and stakeholders had many suggestions for improvements to Caltrain marketing and service. These improvements would not completely fill Caltrain’s operating budget needs, but could improve rider revenue, ridership, and rider support.
| Sports/Entertainment fees | Add transit payment to ticket fee (instead of parking) |
| Wifi on trains | Increasingly common amenity |
| More food vendors/coffee carts | |
| Create annual pass | |
| Create systemwide pass | |
| Increase use of pre-tax commuter benefits | |
| Improve connectivity and first-last mile | Better scheduling connections, improved shuttle services |
Next steps for Caltrain funding
Based on its analysis, the Silicon Valley Leadership Group is going to conduct polling on the top several options, levels, and messages. The results will guide decisions about needed legislation and ballot measures for the 2012 election.
In California, taxes and need to be approved by voter initiative with at least ⅔ approval. This is a high level of support, so it is important to test voter preferences.
Of course, voter preferences also can be affected by advertising, information, and organizing. To increase the likelihood of public support for Caltrain, it is important to show the value of the service to the region, to people who benefit from riding, from less traffic on the highway, clearner air and a stronger economy. It is much easier to pay for some thing that you value.
As can be seen in recent MTC polls and public discussion, voters want to see that their transit dollars are spent efficiently. It is important to show the strong performance of Caltrain compared to other services. This is particularly important since voters who hear about Caltrain’s financial problems often jump to the conclusion that it has problems with ridership or is especially inefficient. Neither of these things are true.
Secondary sources and service improvements
There are a number of secondary of funding sources that won’t cover Caltrain’s operating needs in the short term, but are worth pursuing to build funding for transit. These emerging sources include HOT lanes, parking reduction programs, congestion pricing, and VMT charges. It is useful to take incremental steps now to move these initiatives forward, as part of a long-term strategy to have driver pay more of the true cost of driving, and to balance investments in driving with other forms of transportation.
It is important for Caltrain to continue to make improvements to its service and marketing. These changes can improve rider revenue, and reduce the need for operating subsidy as we have seen with recent surges in ridership numbers with Baby Bullet service and bicycle accommodations. They also can significantly improve rider goodwill and perception, which makes riders more eager to advocate for Caltrain. Riders are a minority of voters, but a core constituency for a funding campaign.
Judging by how little revenue HOT lanes on 680 are brining in, I don’t think they are a valuable revenue source given their cost.
Similarly, comparing the cost of VMT vs raising gas tax a little makes VMT a bad choice as well.
One idea for cutting cost is to have 1 instead of 2 conductors on trains (or off-peak trains). Also, the departure signs in SF terminal are manually changed. Replacing them with TVs to automate them should also bring in some savings.
I always wondered why there are so many Caltrain staff on board each train. Could easily halve the number and have random roving ticket inspectors? Surely a “proof-of-payment” system need only include the threat of a random check to be effective?
I think there are many antiquated union rules that Caltrain has to deal with. It’s ironic that it’s easier to raise taxes, than to change union rules. Some of the strange ones I’ve noticed:
1) Engineer doesn’t open / close doors. The conductor must do that job. This is probably limitation of the actual train cars and locomotives, but you’d think some thought could be added to future trains. As shown by BART, the engineer can effectively stick his head out the window and make sure no one else needs to board.
2) When engineer sees a red signal, he must tell that to the conductor who must acknowledge that. That would be hard to do without a conductor on bard. However, it’s just another rule of dubious value as shown by train accidents by LA.
On the other hand, with 2 bike cars, you probably want a conductor in each one telling bikers how many spots are left in the car, so I can see how that might be hard to do with just 1 person. Although, I’ll still argue that we can get away with just 1 conductor on off-peak trains.
I’m a little unclear what CalTrain’s current train crew arrangement is–is it always one engineer, one conductor, one fare inspector?
I believe the requirement of having a conductor comes from the FRA, rather than just union rules. Even though CalTrain owns the peninsula tracks and freight is rare, it’s still technically part of the national shared railway network.
CalTrain could probably gain more flexibility at least north of SJ if freight trains only operated late at night after passenger service ended. The FRA grants exceptions to some of its rules to systems that share physical tracks with freight but use “temporal segregation”. Many newer light rail systems have this arrangement and only use a single operator.
A simpler way to lower crew numbers would be to let fare inspectors rove from train to train, instead of riding along, so that CalTrain could get by with less than one inspector per train. I think they’re free to set their own policies in this area.
Back to funding: the SVLG study doesn’t list something that I’ve long thought would be a good idea, a tax/fee/whatever on commercial parking spaces. It’s a win-win in that is raises money for transit, and companies can get out of paying it if they make transit more appealing to their employees (I would not complain if they used planter boxes to make some quick conversions of excess parking into landscaping).
Politically, the usual sorts of people would complain about creating a “hostile business climate”. But I think a solution drew partially on a regional gas tax (so drivers pay a bit) and partially on a parking space tax (so companies that put their offices in places that you can only get to by driving pay to) has a kind of fairness that voters would like.
Hi, Nicholas, the SVLG did look at parking in their extended research. While it wouldn’t raise enough money in the near term to fund Caltrain, it’s a good idea for transit policy and funding. The MTC has done a study recently on parking: http://www.mtc.ca.gov/planning/smart_growth/parking/ and here is MTC’s FAQ for common objections to pricing parking: http://www.mtc.ca.gov/planning/smart_growth/parking/3-11/Community_Parking_Questions.pdf
While we’re pissing billions away on a Carl Guardino’s vanity project that doesn’t actually go where the jobs are, Caltrain is dieing on the vine and all people do is talk about *YET ANOTHER TAX* to bail the agency out.
Too bad out short-sighted VTA board is so fixated on BART. The 2000 Measure A allows sales tax money to be spent on the following:
1. Improving Caltrain by double-tracking to Gilroy and electrifying from Palo Alto to Gilroy.
2. Increasing the level of Caltrain service.
3. Connecting Caltrain with the Dumbarton Rail Corridor.
4. Funding operating and maintenance costs for increased bus, rail and paratransit services.
see
http://www.vta.org/2000_measure_a/index.html
Despite this, the VTA board wants all money to go to BART, the rest of the county be damned. More of the existing Measure A revenue should be diverted to Caltrain, saving Santa Clara County taxpayers from the burden of *YET ANOTHER TAX*
In France towns that want train service pay something to the rail operator. Maybe our cities should chip in if they want the trains to stop at their stations. This could be a way for Atherton to get service again.
It seems to me that any additional source of funding through taxation should also require a restructuring of the JPB. Having board members that are all beholden to the regional transit agencies when those agencies are not providing the bulk of the operating revenue creates a conflict of interest in tough financial times, as noted at the beginning of this article. We need board members whose primary responsibility is to the service and the ridership. You cite BART as a funding example, but isn’t the BART board publicly elected? Shouldn’t this be a required part of any package put before voters?
The SVLG and MTC need to include elimination of bridge tolls a part of the regional gas tax. Everybody to drives in the Caltrain service area pays a bridge toll once in a while at least. Plus to garner support for the regional tax those who drive from the east bay will need some incentive to accept the new tax. Otherwise they would be paying a higher gas tax AND a bridge toll. Much of the bridge toll goes to paying the toll collection apparatus which is unnecessary with a gas tax. Since these same drivers could benefity from Dumbarton Rail Service or ACE accross the Dumbarton they would see 2 benefits instead of 2 taxes.