During this pandemic, the public transportation system is facing tremendous challenges. On top of fare shortfalls caused by an up to 90 percent decline in ridership, public transit agencies are losing revenue on sales tax, the traditional funding source for public transportation which fuels many of these systems for as much as a quarter of the total funding share. As we emerge from the COVID-19 pandemic, it is imperative that we plan to bolster our public transportation system, starting with a foundation of diversified and progressive transportation funding sources.
Public transportation is not only a vital service during an emergency — providing essential workers including health, food service, grocery, drug store, and transit workers with mobility as they serve on the frontlines of the COVID-19 crisis.
Accessible and resilient transit promotes civic health (so evident in the Black Lives Matter protests these past weeks), during a pandemic and for decades after, connecting every part of public life without being driven by private profit.
A strong public transit system is also a long-term solution to another problem: The climate crisis. The temporary emissions reductions we have experienced during this pandemic can potentially become permanent if we shift public transit policies. In the next several decades, policy efforts such as a regional transportation measure could have transformative effects on our communities, potentially generating billions of dollars to support a more connected, affordable and accessible transit system that serves everyone. The regional transportation measure could also reduce greenhouse gases and traffic congestion. Bay Area voters understand these long-term transformational investments are necessary, and they also believe that they need to be funded fairly.
Through the passage of significant state level housing legislation, including the strongest tenant protections in the nation last year, the Bay Area has made some headway among U.S. regions most poised to succeed in building an “equity driven metropolis.” Next is focusing on our region’s transportation agenda. The regional transportation measure, if approved by the voters, has the potential to keep pace with our ambitious housing goals. With these hard-won democratic successes within our reach, California can, for the next several decades, continue to advance policies that center on the needs of its most impacted communities.
There are also tensions embedded in these efforts. For instance, among the revenue sources being considered to fund the transportation improvements, the primary focus has been on a sales tax increase, with little attention being given to the regressive consequences for low and moderate income residents. Like other regressive taxes, sales tax inherently captures a higher percentage of income from lower income households than higher income households. Sales taxes use a single rate for all purchases and are imposed primarily on households, not business purchases. In California, households contribute over 60 percent of total sales tax revenues.
In early March, the Voices of Public Transportation* coalition conducted a poll that asked voters for their opinion on potential transportation tax measures. The poll presented voters with alternative funding options based on a recent study commissioned by Silicon Valley Community Foundation, which focused on revenue sources that could mitigate any regressive impacts on low-income households and/or businesses providing middle wage jobs through effective exemptions.
The study showed how collective annual revenue streams from several of these sources, such as personal income tax ($900M), business parking tax ($570M), a parcel tax ($155M) and/or a corporate head tax ($203M) are comparable to the revenue generation estimates from a high-yield sales tax ($812M). Moreover, these alternative sources appear to have additional benefits such as reduced automobile commuting, reduced greenhouse gas emissions, and/or reduced income inequality.
The results of the poll revealed that even in the midst of COVID-19, 87 percent of Bay Area voters supported investments to make the region’s transportation system more affordable, accessible, and connected. Following the failure of three transportation sales tax measures in Contra Costa, Sonoma and Napa at the ballot in March 2020, the poll reiterated voters’ lack of interest in a sales tax, which garnered only 60 percent approval, while voters approved of a surcharge on personal income tax of millionairess by 66 percent. A tax on incomes above $300,000 garnered nearly as much support, with 63 percent of voters saying they would approve such a tax — and that tax would generate a whopping $1.7 billion per year for transit.
Other progressive tax alternatives —such as the head tax (60 percent approval) and business parking tax (59 percent approval) —also garnered strong public support particularly from transit riders, younger voters, lower income voters, and bike riders and pedestrians. These alternatives would ensure that larger employers pay their fair share to address the challenge of high job growth, which has resulted in increased traffic and skyrocketing housing costs.
Results from this poll and failed sales tax ballot measures make it clear: future efforts such as Senator Jim Beall’s (D-Campbell) Senate Bill 278 regional transportation funding measure should reject any plan or vision that imposes unfair sales taxes and subjects already struggling families to further burdens. Instead, efforts should diversify revenue sources and build a solid fiscal footing that includes progressive tax measures.
We sincerely urge the Association of Bay Area Governments, the Metropolitan Transportation Commission, and State legislators to include these viable alternative revenue sources in any future consideration of transportation funding legislation.
Ultimately, we need multiple progressive revenue sources, such as a combination of income tax and a parking levy, and we need to weigh multiple priorities for the region in defining the purposes of the transportation funding legislation.
COVID-19 reminds us of our interconnectedness as a community and that our vulnerable residents and small businesses are first to bear the disproportional costs of the pandemic, revealing the racial and economic inequities that have long existed in our communities. It also reminds us that we depend on resilient infrastructure systems. We can make new investments in public transportation improvements and do so in ways that do not create an additional burden on those facing serious economic hardship. These polling results show us that the solution is clear: Those who can pay more should pay more.
* The Voices for Public Transportation coalition is made up of organized labor and community-based organizations and is working towards better and more equitable transportation for all. They conducted the poll with support from foundations including Silicon Valley Community Foundation, San Francisco Foundation, separately and as part of the Great Communities Collaborative (which includes a few other funders) and the Chan Zuckerberg Initiative.
Vinita Goyal is program officer of housing and transportation at Silicon Valley Community Foundation, and an independent researcher. Thea Selby is co-chair of rider advocacy organization San Francisco Transit Riders, and a founding member of Voices for Public Transportation.