Bay Area planners back local fuel tax for transit

March 15, 2010

Note: Here is my Sunday column from the New York Times, on the idea of a local sales tax on fuel to pay for transit. For the rest of the Times’ Bay Area report, go here.

By Daniel Weintraub

Democrats in the Legislature threw a fiscal lifeline to public transit last week, bolstering financing for buses and trains at a time when the state is cutting just about everything else.

But leaders of the Bay Area’s Metropolitan Transportation Commission saw the moment as a lost opportunity for fundamental change in the way California pays for public transit.

The Bay Area commission is perhaps the state’s strongest advocate for a proposal that would allow voters to adopt local fees on gasoline and diesel fuel to finance transit service and pay for street and trail improvements that would benefit pedestrians and cyclists.

That provision was in a version of the transportation bill passed by the Assembly last month. But it was dropped in final negotiations with Gov. Arnold Schwarzenegger before lawmakers sent the package to his desk.

As it now stands, the legislation would engineer a complex tax swap, repealing the state sales tax on gasoline while increasing the per-gallon excise tax and the sales tax on diesel fuel. The end result would be an immediate $400 million infusion for transit operations and $350 million a year dedicated to transit beginning in 2011. It is not clear how much of that money would come to the Bay Area.

Randy Rentschler, who follows state legislation for the commission, said his agency’s leaders were grateful for the relief, but still thought the Legislature had taken away far more than it gave back last week.

That is why they see a local fuel fee as such an important step: it could free transit from the whims of state government and its often disruptive revenue swings.

“Local government and state government need a clear separation,” Mr. Rentschler said. “Some people would use the word ‘divorce.’ ”

A local fee, he said, could provide a big boost in financing for transit. Transit operations in the region now cost about $2.2 billion a year. A fee of 10 cents a gallon would raise about $300 million annually in the Bay Area.

That money would help reverse the damage from recent service cuts and fare increases the local districts have adopted. The San Francisco Municipal Transportation Agency raised fares by one-third last year, and the Alameda-Contra Costa district increased basic fares by 14 percent. BART raised fares by 6 percent and charged for parking at more stations.

But most transit districts in the Bay Area and throughout California have been lukewarm to a local-option fee. Many transit operators worry that the state will continue to cut their financing, forcing them to seek support for a fee increase from local voters, with the prospects for approval uncertain at best.

The version of the gasoline fee in the Assembly bill was even more problematic, in the view of transit operators, because it was linked to regional efforts to reduce heat-trapping gases that exacerbate global warming. The regional plans will be years in the making.

Transit agencies face an immediate financial crisis because the state has reduced aid at the same time that the recession has depressed local sales tax collections and fare revenue. The transit districts need money now to preserve service, and most cannot afford to wait on the chance of something more promising a few years down the road.

“There is a lot of uncertainty right now,” said Seamus Murphy, who manages government affairs for the San Mateo County Transportation District. “We don’t know how that fee would be implemented, or whether it will be, or when.”

But Mr. Rentschler, of the transportation commission, said the apparent certainty in the latest plan was illusory. He said that any new money from the state would be great while it lasted, but that he had seen such promises evaporate before. Even this agreement was concocted to find a way around a legal judgment that had ordered the Legislature to give far more money to transit.

“The question is what is going to happen in the future if the state’s deficit is chronic,” he said. “If past is prologue, the deal we cut this year won’t be worth much next year.”

Senator Mark James DeSaulnier, Democrat of Concord, agrees that transit needs a sustainable revenue source to grow as land-use planners seek to shift more people out of their cars to reduce heat-trapping gases.

“I don’t think we’re letting go of the idea,” he said of the Democrats in the Legislature. “This is something we need to do.”

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