What the Measure Would Do
Measure RR would increase the sales tax in San Francisco, Santa Clara and San Mateo counties (“member counties”1) by one-eighth of a percentage point and dedicate the revenue to Caltrain. This would create the first dedicated funding for Caltrain, which currently relies on annual discretionary appropriations from its member counties. The measure would generate an estimated $108 million per year for operations and capital improvements.2 These funds would eventually be dedicated to implementing Caltrain’s Long-Range Service Vision, which enumerates the train frequency levels, types of service and associated infrastructure that Caltrain aims to deliver by 2040.3 However, first the funds from this measure would be used to sustain Caltrain operations during the period of lower ridership that has resulted from the pandemic.
If Measure RR passes, the member counties would cease their annual contributions to Caltrain’s operating budget and state-of-good-repair capital contributions, thereby increasing the ability of the member counties to fund local transit or other needs. 4
The Backstory
Senate Bill 797 in 2017 authorized the Peninsula Corridor Joint Powers Board (“Caltrain Board” for short) to submit a three-county ballot measure for a one-eighth percentage point increase in sales tax. The law required the measure to be approved by a two-thirds majority in each of seven different entities: boards of supervisors in each of the three counties, the transit agency for each county and the Caltrain Board.
The ballot measure approval process became complex and was delayed when elected officials in San Francisco and Santa Clara counties sought to initiate Caltrain governance and institutional changes aimed at increasing the board’s independence from the San Mateo County Transit District (SamTrans).5 Currently, Caltrain is staffed by SamTrans and shares the same general manager, auditor and general counsel. This gives disproportionate influence to San Mateo County, causing frequent tension between the member counties and making it more challenging to elevate regional priorities. But in a compromise agreed to in August 2020, the Caltrain Board agreed to interim measures that offer some independence from SamTrans until a satisfactory governance model is approved by all three counties.6
Voter approval of Measure RR requires a collective two-thirds majority vote across all three counties. Only the total percentage matters, not the percentage in each county.
Equity Impacts
As a sales tax, albeit a small percentage, Measure RR would add some additional burden for low-income people, who are disproportionately impacted by sales taxes. (Recent SPUR research has established that low-income people in the Bay Area pay three times more in sales tax, as a share of income, than high-income residents do.) On the other hand, investing in Caltrain could benefit historically underserved communities. In September, the Caltrain Board took action to make Caltrain a more equitable service by passing its Equity, Connectivity, Recovery and Growth Policy Framework.7 The policy proposes more equitable service planning through increased off-peak service, improved station access, more equitable fares and a strategy to better understand the needs of customers.
If Measure RR passes, local transit services in the member counties would likely benefit because counties would keep the funds they have historically contributed to Caltrain. Transit operators would have the option of applying this additional revenue to serve low-income communities.
Pros
- Caltrain is a key part of the region’s rapid transit network, reducing congestion and greenhouse gas emissions while increasing access to jobs and services. Measure RR would allow Caltrain to continue operations at or near current levels. Without the increased funding from this measure, Caltrain might need to severely reduce or shut down operations until the pandemic ends and strong demand for service returns.
- Currently, the lack of dedicated funding for Caltrain is a major obstacle to reliable operations planning and rational governance.8 In the past, differing priorities among the three counties have made it difficult to fund regional improvements.
- The funding from Measure RR would support the implementation of the Caltrain Service Vision9 and Caltrain Business Plan,10 a strong foundation for growing Caltrain ridership, improving efficiency, updating infrastructure and charting a course for better governance. These critical steps are needed for sustainable growth, transit efficiency and reduced automobile dependence in the core of the region.
- Caltrain’s polling shows that 70% of frequent Caltrain riders plan to use Caltrain again once the pandemic is over, at least as often as they did before COVID-19. This points to the need to continue investing in the transit system.
- Caltrain staff estimate that projects and operations associated with the measure would create 16,000 jobs over the next several years.
Cons
- Sales taxes are regressive, and the impact of Measure RR would fall disproportionately on lower-income households in Santa Clara, San Mateo and San Francisco counties. And Caltrain’s relatively wealthy ridership12 makes a regressive tax even less desirable as a funding mechanism.
- Although surveys suggest a strong return of Caltrain ridership post-pandemic, the future is unclear given the extraordinary growth in remote work, particularly among the types of knowledge workers that form a large share of Caltrain riders. This uncertainty makes it more difficult to know which transit investments should be highest-priority.