New sales tax bill would provide dedicated funding for Caltrain

A bill filed yesterday for a 1/8 cent sales tax could fix Caltrain’s chronic budget problems caused by the fact that Caltrain’s annual public funding has been voluntary on the part of the 3 county partners in Santa Clara, San Mateo, and San Francisco.

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The bill doesn’t say yet when the tax would go on the ballot. San Francisco and San Mateo counties are also considering transportation sales taxes for the fall of 2018, and there are questions about whether local ballot measures and a dedicated Caltrain tax would complement or interfere with each other. Local polling would be needed to answer those questions.

To put the sales tax on the ballot, it would need to be approved by 2/3 of the Caltrain board, and by the Supervisors of all three Counties, and then the measure would need to be approved by 2/3 of the voters in all three counties.

To appeal to voters, it would be helpful to know whether the bill would pay for better Caltrain service.  The prospect of better service would be more attractive to taxpayers than getting regional agencies to stop arguing about their annual bills.

Also, it would be valuable for Caltrain to plan and set expectations for how this fits into a roadmap to provide major increases in capacity and improvements in service over time.  An 1/8 cent sales tax will help cover annual operating and maintenance costs, but additional investments will be needed to serve (for example) Diridon Station when Google moves in 20,000 or so workers.

Some community members have also been asking why the proposal to provide dedicated funding for Caltrain is presented as a sales tax, which is regressive, rather than a business tax. Some local cities, including Palo Alto and Mountain View, have been discussing business taxes to help pay for transportation infrastructure, but those measures have been proposed more for local projects, and none of them is moving forward as far as we know.

And some stakeholders ask whether Caltrain, which already gets 60% percent of its revenue from riders, should be able to financially break even, paying for its service and maintenance from rider revenue, especially since Caltrain serves riders who are high-income on average.

But when Caltrain raised fares most recently, ridership dipped.  And solid data from Palo Alto downtown Transportation Management Association shows that less than 30% of workers at larger tech companies drive (many taking Caltrain), while 80% of low-income service workers drive (though many would prefer to use Caltrain if they could afford it).   The TMA has a successful pilot with 100 low-income workers using TMA-provided transit passes, mostly Caltrain, validating the unmet demand.

Given the overall benefits of getting more cars off the road; providing lower-stress, sustainable transportation options to commuters including low-income workers; and supporting lower car use in densifying areas, it’s not clear whether running Caltrain at to break even would be the best outcome for the region.  Caltrain’s business planning process will be an important opportunity to gather data and discuss these questions.

The bill was filed by Senator Hill along with Wiener, Beall, and Wieckowski, and with Assembly co-authors Chiu, Kalra, Mullin,  Stone and Ting – representatives of all 3 Caltrain counties.  The bill is backed by business groups including the Silicon Valley Leadership Group and SAMCEDA, the San Mateo County Economic Development Association.

Caltrain’s funding instability bit riders and commuters again this budget year, when VTA’s budget challenges contributed to a risky proposed fare increase and maintenance cutbacks.

It will be a major win for the Peninsula Corridor to end the untenable, ridiculous situation where the backbone transit service of a global economic powerhouse faces maintenance cuts and risky fare decisions or service cuts, because in any given year a partner can choose to pay $5 million less of its annual bill.

This is an important step forward – what do you think?