☆ Bay Area transit dreams, taxpayers’ nightmare
Transit ridership is limping along--usually below pre-Covid levels--yet Bay Area lawmakers want another half-cent sales tax under SB 63. Decades of rising costs, union-driven wages, and pricey “green” megaprojects mean Silicon Valley residents are footing the bill while getting less service in return. Marc Joffe (Visiting Fellow at California Policy Center and President of the Contra Costa Taxpayers Association) and Athan Joshi (CPC intern and Opp Now contributing editor) untangle the mess in this exclusive.
Transit agencies across five Bay Area counties are looking for more taxpayer support next November even as ridership across these agencies remains subdued at just 50-75% of pre-Covid levels. As we found in a new study of California transit, it is not the first time and will almost certainly not be the last time bus and train providers will have to tap the area’s beleaguered taxpayers.
Our analysis of the federal National Transit Database (NTD) for FY 2023 (the latest available) revealed a $10 billion gap between the costs of operating and maintaining California transit and the revenue agencies generate. Over 40% of the losses were recorded in the Bay Area, where the cost share punches way above the population share. The financial struggles and excesses of BART and SF Muni are well known, but the problems extend to other agencies as well.
For example, consider SamTrans, the San Mateo County Transportation District, where fare revenue of $11 million represented less than 6% of the agency’s $193 million of operating expenses in FY 2023. SamTrans' efficiency has deteriorated: the Metropolitan Transportation Commission found that vehicle service hours per full-time equivalent employee decreased from 1187 in FY 2018 to 855 in FY 2023, so a full-time bus driver is now spending less than half his or her working time actually picking up and dropping off passengers..
Recently, SamTrans announced plans to spend $36.3 million on new charging infrastructure for its battery electric buses (BEB). BEBs, which appear not quite ready for primetime, are not only expensive to charge but they are expensive to buy as well. SF Muni recently entered into a contract to acquire six of these vehicles for $1.5 million each. Overall, BEBs cost about twice as much as diesel buses. SamTrans trumpeted their clean air benefits, but their impact on total pollution will be minimal since bus trips account for less than 1% of miles traveled in San Mateo County. BEBs also weigh considerably more than diesel buses, damaging roads and necessitating more frequent repaving.
Meanwhile Caltrain’s electrification project cost $2.4 billion even as ridership lingers at just 60-65% of pre-Covid levels. The decreasing share of miles traveled on transit calls into question another justification for pouring more money into buses and trains: that they free us from congestion.
Despite these sobering statistics, Bay Area legislators are aggressively pushing SB 63, the state’s “Keep Transit Alive” proposal. The measure aims to rescue BART, AC Transit and Muni from impending collapse. If passed in November 2026, it would authorize a half‑cent sales tax across five Bay Area counties. A modest‑sounding levy in theory, but layered on a region already feeling taxed to its seams. In the last 10-years, Bay Area counties have already added a new half-cent tax to fund transit: Measure BB in Alameda County in 2014, Measure B in Santa Clara County in 2016, Measure W in San Mateo County in 2018.
And if the SB 63 sales tax is enacted, we doubt whether it will be the last transit tax. We found going all the way back to 1947, the cost of transit has been rising in real terms. This is because transit is labor intensive, and transit unions have been able to push worker compensation up at a rate faster than the rate of inflation.
Silicon Valley’s transit vision of electrification, zero-emission vehicles, and new infrastructure might seem appealing but the underlying financial and operating reality remains bleak: modest ridership, low service reliability, soaring labor costs, high subsidies, and multi-billion dollar projects that offer minimal near-term relief. Meanwhile, taxpayers continue to shoulder the burden.
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