If you want to play a fun game, ask people in the know to describe the fiscal state of the San Francisco Municipal Transportation Agency.
You’ll get a sharp inhale. An “incredibly dire.” An “extremely concerning.” Maybe even a “clusterfuck” or two.
The agency’s revenue was in decline before the pandemic, and Covid pressed the accelerator. Add the expiration of state and federal funding meant as a backstop, and you’re hit with some pretty big, pretty bad numbers that could spell the end of the system as we know it.
During the next fiscal year, the agency’s deficit is tagged at $15 million, but that could balloon to $322 million the year after.
The scale of that gap might surprise Muni riders who recently gave the system its highest satisfaction score in 20 years. Moreover, ridership has recovered to 78% of 2019 levels, in the top tier of transit systems nationally. Another sign of Muni’s popularity? Some items in its merch store that launched this month have already sold out.
But Muni is only part of the story, and fares make up only 8% of the MTA’s budget. Revenue from parking (particularly at formerly packed downtown lots) has dropped 31% from before the pandemic, dragging down the agency’s fiscal outlook while costs continue to increase.
Conversations with lawmakers, SFMTA staff and board members, and transit policy wonks reveal a big shrug on what’s next. Meanwhile, a new mayor prepares to take office amid furious efforts to throw a life-raft tax on the ballot in 2026 to keep Muni, BART, and Caltrain afloat.
“I don’t have any answers right now; I have a lot of questions,” said Supervisor Rafael Mandelman, who serves as chair of the San Francisco County Transportation Authority. “The odd piece about these Muni funding conversations we’re having is that in some ways, the most important actor is not in the room yet.”
If one thing is clear, it’s that prospects for another rescue package from Sacramento are dim. And President-elect Donald Trump’s return to the White House will presumably kill the possibility of a federal bailout. That means instead of waiting for a white knight, the region needs to help itself.
“There’s a sense that the ball is back in our court,” said Sebastian Petty, a senior transportation policy advisor for urban planning nonprofit SPUR. “Maybe the state can step in and get us to a presidential year, but we all need to be part of the solution.”
One attempt on the ballot this month was Proposition L, which would have taxed rideshare companies to pay for Muni. But a poison-pill provision in business tax reform measure Proposition M negated the effort.
Although Prop. M backers insist they weren’t trying to spoil Prop. L, critics are dubious. Kat Siegal, a member of the county Transportation Authority’s community advisory committee who co-authored Prop. L, said when her campaign reached out to the other side for discussions, the response was essentially “Lose my number.”
Prop. L advocates say their idea to tax rideshare companies would have raised around $25 million for public transit, enough to head off next year’s Muni deficit. But little use crying over spilled taxes.
Now, all eyes are on an effort by the regional Metropolitan Transportation Commission to put some sort of transit-saving tax before voters in 2026. At its next meeting, set for Dec. 9, the MTC intends to hammer out a framework for a ballot measure.
This is no simple matter. First, a majority of the commission must agree on a concept for the measure. Then state lawmakers need to introduce legislation to allow a regional ballot measure. Then comes the campaign, which would probably include a signature-gathering effort to get a measure on the ballot with a 50% threshold for passage.
The central question, particularly from counties like Marin and Santa Clara, is: Why should we pay for a transit system that benefits mostly other parts of the region?
State Sens. Scott Wiener and Aisha Wahab co-authored a bill last year to allow for a ballot measure that would’ve raised taxes to fund transit agencies in nine Bay Area counties, but internal squabbling sank it. Little has changed since then. But the fiscal cliff is getting close enough to peer off the edge.
“Considering the parties, I would imagine we see the lowest-common-denominator solution,” said Tom Radulovich, senior policy fellow at urban planning nonprofit Liveable City. “At some point, nobody wants to watch the puppy drown.”
The greatest amount of political support, according to sources at the MTC meetings, is for a middle-ground taxation path that would raise around $560 million annually, mainly from San Francisco, Alameda, San Mateo, and Contra Costa counties.
But there’s not a clear consensus on some basic policy points, such as how long the tax would be in effect; whether it would be a sales tax, parcel tax, or some combination; and how much each county would be expected to cough up. Potential scenarios can be viewed here.
Complexity adds legal risk, which could mean money being held up by the courts, as well as a more pedestrian challenge: There’s concern that summaries of all the carveouts wouldn’t fit on the ballot page.
But even if all goes well on the regional measure, Muni would be left with a massive budget hole.
“I suspect there’s no single source that will bring in enough to close our gap by itself,” SFMTA Director Jeffrey Tumlin told The Standard. “We’re thinking of everything from all of the ways voters might approve new taxes to rethinking parking to bake sales.”
Much has been made of the prospect of shutting cable car lines, icons of the city. Few believe that will actually happen. The real solutions are likely to be less dramatic but still impactful: increasing nighttime and weekend metered parking, cutting back on pedestrian safety projects, lowering the frequency of popular lines, and cutting duplicate and less-trafficked buses.
In February, marginal service changes will take place on the 30 Stockton, 24 Divisadero, and 38 Geary lines. Additional shift changes will likely come in the summer, but no firm policies have been presented.
Incoming Mayor Daniel Lurie will have to decide how much of the city budget to dedicate to Muni amid years of nine-figure budget deficits.
“Does he want to be known as the mayor that saves Muni, or the Muni-service-cut mayor?” transit activist Chris Arvin asked. “I think that’s a big question for him.”
Since transportation policy was not a key pillar of Lurie’s mayoral campaign, observers are trying to read the tea leaves. Although Lurie opposed Prop. K, which will close a portion of the Great Highway, he backed the taxes proposed by Prop. L.
In a survey by the San Francisco Transit Riders, Lurie wrote that if new funds don’t materialize to close the budget, he supports making focused cuts.
One signal of where Lurie would try to steer Muni is whether he makes a change in leadership. Tumlin, whose contract expires at the end of the year, said conversations about his future at the agency are ongoing.
Lurie didn’t respond to a request for comment on Tumlin’s future.