South Bay’s VTA Says It Can’t Back Regional Transit Tax Measure

The South Bay’s main transit agency has come out against a state Senate bill that would pave the way for a 2026 regional tax measure to raise money for the Bay Area’s bus, train and ferry operators and other transportation needs.

In voting last week to oppose SB 1031, known as the Connect Bay Area Act, the Santa Clara Valley Transportation Authority board cited the possibility that putting the measure on the ballot in 2026, which other transit agencies and legislators are pushing for to plug expected budget gaps, could undercut the county’s efforts to get voters to reauthorize existing transportation sales taxes, among other concerns.

Jim Lawson, the VTA’s chief of external affairs, said Santa Clara County sales taxes raise about $900 million a year for transit and transportation in the Bay Area’s most populous county.

“If we do not have the ability to say whether or not this is the right time to put something (new) on the ballot, we have a serious existential problem,” Lawson told the board.

Lawson did not clarify the district’s concerns about the potential election date, and a VTA representative said Monday that the agency “is not prepared to address an election date at this time.”

The Bay Area transit agencies, advocates and legislators pushing for a vote in November 2026, responding to potentially catastrophic budget deficits caused by declining ridership and the slow return of daily work commuters, have argued that that’s the latest date a vote could help BART, Muni and other operators get the cash needed to avoid major service cuts.

The Metropolitan Transportation Commission estimates that regionwide transit deficits will total at least $700 million a year starting in 2026. Total deficits over the next five years are expected to top $2 billion.

The measure outlined by SB 1031 would raise $1.5 billion a year in the region’s nine counties, likely in the form of a half-cent sales tax possibly coupled with a parcel tax or another type or levy, but VTA management and South Bay officials say the bill fails to guarantee that new tax revenue raised in Santa Clara County would be funneled back to the county for use there.

More than half of the overall revenue would go to pay for transit operations and initiatives to help coordinate fares, schedules, signage and other operational needs among the region’s 27 transit agencies. Part of the revenue would also go to street safety and highway improvement projects.

The MTC would administer the proceeds, and the bill requires at least 70% of the money raised in each county to be spent on projects benefiting county residents.

That percentage is too low for Santa Clara County officials, who want the cash returned directly to the counties without the San Francisco-based MTC’s involvement.

Sen. Dave Cortese, the San Jose Democrat who chairs the state Senate Transportation Committee, summarized that position during a hearing that approved SB 1031 on April 23.

Santa Clara County residents already account for 30% of all sales taxes in the region, he said, adding that asking them to tax themselves further but not have control of the proceeds is “not going to fly.”

“You could see why that would be problematic … if you took one county with 30% of the sales taxes and said, ‘Put it in an envelope, send it in a check to San Francisco, and we’ll figure out how to redistribute it for you.’ It’s a hit piece waiting to happen,” Cortese said.

In response, SB 1031’s sponsor, San Francisco state Sen. Scott Wiener, stressed the need for regional cooperation to get a transit funding measure done.

“As we all work together to address the needs of different counties, we need to never forget that we’re not just our county, that we all depend on each other, and we all rise or fall together,” he said.

Behind-the-scenes negotiations on the legislation are ongoing, including the VTA, MTC and Cortese. It gets its next hearing before the Senate Appropriations Committee on May 13.