2006 Budget Notes
Tough Budget Year Ahead for Muni
By Daniel Murphy - from the 1/05 Transfer
The defeat of two tax measures on the November ballot-Propositions J and K-along with soaring health care and retirement costs mean that Muni is facing a budget deficit of between $49 million and $70 million over the next eighteen months. Fare increases and service reductions are among the options contemplated for closing this unusually wide gap. This year, however, the Municipal Transportation Agency (MTA), which runs both Muni and the Department of Parking and Traffic, included other options in their budget presentation to the MTA Board. These include:
Parking taxes. Right now, the tax on commercial parking spaces is 25%; an increase to 35% could raise an additional $8.6 million per year, half of which would go to Muni. This would require a two-thirds vote of the people, but other cities have voted to raise parking taxes to pay for transit, and revenue measures for transit have fared well in the last several election cycles, so this seems viable. The next scheduled election is November 2005, however, meaning the change couldnąt go into effect until early 2006. Rescue Muni supports an increase in the parking tax to fund Muni.
Parking meter increases. Meter rate increases would require only a vote of the Board of Supervisors, and could go into effect a few months after approval. MTA estimates that an increase could bring in $2-4 million annually. The MTA Citizens Advisory Council also recommended expanding meter hours in selected locations. Rescue Muni supports an increase in parking meter rates.
Parking fine increases. Parking fine increases are another revenue measure which requires only a vote of the Board of Supervisors, and could raise an additional $2-10 million per year, half of which would effectively go to the MTA. One problem with fine increases is that, in the long run, they change behavior-far fewer people violate the law when the fines get sufficiently steep-so it's difficult to raise fines in way that maximizes revenue. But many parking offenses- particularly sidewalk and bus stop parking-interfere with Muni riders and should, for that alone, be penalized heavily. Rescue Muni supports higher parking fines to fund Muni.
Parking garage rate increases. The MTA Board can raise parking garage rates by itself, and implementation would take just a few months. Market rates limit how high parking garage rates can go, however, since the city competes with private garages which can adjust their rates to meet market demand. Rescue Muni supports raising all garage rates to market level, however, and it's possible the market rate would increase if the voters also approve a higher parking tax, some of which would be passed on to private garage customers.
Parcel tax. Because of state law, raising property taxes is difficult, but a flat parcel tax for transit could be approved by a two-thirds vote of the people. A $100 per parcel tax could bring in $1.8 million annually. it's possible to base parcel taxes on the size of a parcel, but not on the value of the parcel, so some might argue that this constitutes a somewhat regressive tax, falling disproportionately on small property owners and, possibly, renters. Rescue Muni hasn't taken a position on a parcel tax.
Local gasoline tax. State law permits a local tax of 1 cent per gallon of gas, but limits its use to the construction and maintenance of public transit guideways, not operating costs. Such a tax would raise $2 million per year and require a twothirds vote of the people. One potential problem with such a tax is that some people might simply choose to buy gas in San Mateo County, thus creating some additional traffic and pollution, and cutting into San Francisco's gas tax revenue. Rescue Muni hasn't taken a position on a local gas tax.
Local vehicle environmental impact fee. A fee charged against registered vehicles in San Francisco would require authorization from the state legislature and the governor, and would take at least two years to implement. How much money such a fee could raise is still unknown, and would depend both on how much was authorized by the state and how lawmakers split the revenue between MTA and the City. Rescue Muni supports a local vehicle fee for Muni.
Discontinuing Fast Pass use on BART. Currently, Muni Fast Passes are good on BART for trips that begin and end within San Francisco; Muni reimburses BART 87 cents for each Fast Pass ride. Ending this practice would save Muni about $9 million per year, but that would be offset in two ways: first, some Fast Pass users would stop buying passes and pay BART directly for their ride; second, Muni might have to provide new service, particularly in the Mission corridor, to people who switched from BART to Muni. Currently, the marginal cost of new Muni service is well above 87 cents per ride. Rescue Muni opposes ending Fast Pass use on BART, and believes the current policy is good for Muni riders (because it provides them more choices), for Muni (because it's a relatively inexpensive way to provide service), and for BART (because many commuters ride trains that are less than full, allowing BART to collect revenue without the cost of additional service).
While not all of these proposals are equally good or equally viable, this year MTA is making a much greater effort than before to expand the debate over revenue and present options other than the usual litany of fare increases and service cuts. The projected deficit for the next eighteen months is so large that it's very likely MTA will put forward a package containing a mix of fare increases, service cuts, and other revenue options. Rescue Muni will fight to ensure that other revenue options are maximized before any fare increases or service cuts are considered.