A new transportation tax intended to prop up Bay Area transit systems just went down in flames. Though this isn't completely dead yet, it's another sign that some of the city's doom loop worst case scenarios are in danger of coming true.

Bay Area transit agencies had been praying for a new transit tax that promised to save them from dire financial straits. But lawmakers pulled the plug on the bill BART and Muni had been banking on—amid growing opposition.

Now, the transit operators will have to wait at least another year before a new effort to save the cash-strapped systems can be launched.

State Sens. Scott Weiner (D-San Francisco) and Aisha Wahab (D-Hayward), the bill’s authors, promised to introduce new legislation in 2025. The bill would’ve gone to voters on the 2026 ballot.

I wrote about this new tax proposal when it was introduced in March. The underlying problem is that BART ridership is still at about 45% of what it was prior to the pandemic. And since 70% of BART funding was paid by people's fares, the decline in ridership has blown a huge hole in the system's budget. 

Last year the city went to the state and begged for money to fill the coming gap. They got it but since then the state is now facing a big budget deficit of its own so that source of funding is off the table. Instead, state Sen. Scott Wiener came up with the tax idea which was designed to bring in about $1.5 billion per year to prop up the BART train system and other public transportation in the Bay Area. When it was announced, the proponents made clear this was a desperate situation.

Without a boost in funding, transit advocates on Monday warned of a "death spiral" whereby service cuts could further diminish ridership, leading to ever-worsening budget crises. The commission estimated that Bay Area transit operators will face a budget deficit of at least $600 million if new funding doesn't come through.

I've gone through this before but the whole concept of a doom loop is about a feedback cycle that not only breaks down people's desire to travel downtown but also eventually limits their ability to do so. In other words, one of the key systems that falls apart in a doom loop is public transportation. And that's what we are seeing happen in San Francisco. The current system is simply too expensive for the number of people it currently serves. The system should have started cutting service last year but it didn't do so because a) it had a bunch of federal pandemic money which hadn't run out yet and b) it got millions more in state money last year to keep the service running. 

But at some point that money will be gone and the same choice will present itself. Either cut services or find another source of revenue. The tax plan was supposed to fill that gap but it collapsed because Santa Clara County, which is a huge county south of San Francisco with about double San Francisco's population, found out it was going to be hit with the bulk of the bill. Worst yet, the way the bill was written, they might not get any say in how the money was spent.

A regional sales tax would also be a heavy political lift because Santa Clara County would provide 32% of the revenues for the seven counties, by far the largest share, but would have little control over how it’s spent nor receive benefits in proportion to its contribution.

The bill would allow four of the seven counties with a majority of the population to control the spending. That means that the three BART district counties, Alameda, Contra Costa and San Francisco, if they can join forces with another county, could impose their will on Santa Clara County.

Asking someone else to pay their bills seems pretty par for the course in San Francisco at this point. But there were other questions about how the bill was written:

South Bay leaders have good reason to be concerned, starting with Wiener’s mixed messages about the purpose of the tax. Is it to help BART bridge its self-inflicted, post-pandemic financial wounds, in which case 30 years is ridiculous? Or is it to implement an as-of-yet undefined plan to reshape and integrate Bay Area transit?

“If it’s a short-term problem we’re trying to solve, then it should have a short-term timeline,” Chavez said. “And if it’s a long-term problem we’re trying to solve, we should just say it out loud and take the time to do it right. And this does neither.”

San Francisco is looking for someone to save their downtown by propping up public transit at levels that are currently unjustified by ridership. Federal and state taxpayers have already contributed to this cause but beyond next year, they will need a new source of funds. The fact that the first attempt to push this through failed is a bad sign.

Maybe they'll be able to rewrite this plan next year and still get it on the ballot in 2026 but that will mean shifting more of the burden onto the counties that actually benefit. At this moment, it's not clear how much other counties in the area are willing to pay for the privilege of public transport that few people actually use.