Potential cuts to San Francisco’s public transit system would be significantly worse for the city’s economy than the effects of a proposed parcel tax to fund it, according to a new analysis from the controller’s office released Wednesday.
The report analyzed Proposition H, which is on the Nov. 3 ballot and would impose a parcel tax to raise money for Muni. The city would net 800 to 1,445 additional jobs over 15 years and increase its GDP by between $310 and $400 million by passing the measure, but not doing so would result in a “substantially worse transportation system,” the report warned.
“While the parcel tax carries an economic cost, this analysis finds it would clearly be a smaller cost than these significant cuts to Muni services,” the report reads.
City officials stand united in support for Prop. H and the measure is heavily funded by the city’s downtown businesses. It has become a priority for Mayor Daniel Lurie, who campaigned on reversing San Francisco’s downtown decline.
Without the cash infusion from Prop. H, Muni would face steep service cuts that could include reducing frequency on certain routes by up to 50 percent, suspending less-used lines and reducing nighttime service. That would be devastating to downtown recovery, which rests on frequent transit for workers, shoppers, and people about town.
The San Francisco Municipal Transportation Agency faces a large deficit, and Prop. H would generate an estimated $184 million in annual revenue, according to the controller’s office and the SFMTA.
Homeowners would account for 25 percent of the tax revenue, while commercial property owners would account for 75 percent. The parcel tax would remain in place for 15 years.
Separately, another tax measure is also on the ballot: A regional sales tax that would raise funds for transit systems across the Bay Area, including Muni, BART and Caltrain. That measure was not factored into the controller’s analysis.
The projections for Muni without the parcel tax are dire: Should the transit agency make cuts, there would be an estimated 18 percent decrease in “unlinked” Muni trips (those are trips where riders don’t transfer to BART or other transit) and more than 15,000 hours of trip delay per weekday for San Francisco residents. Transit’s share of all trips taken would also go down by 1.5 percent.
The SFMTA has relied on a number of short-term solutions to temporarily plug its growing deficit. Prop. H, as well as the regional tax measure, would provide a long-term financial reprieve and let the agency maintain full service.
The report details the number of ways in which a reduced transit network would affect the local economy. A system with more delays and fewer connections would reduce the number of people who can work in San Francisco, increase commute times and reduce labor productivity.
The report acknowledges that, whether the measure passes or fails, property values will decrease. For residential properties, the drop is more severe if it fails: The tax would drive residential property values down by 0.2 percent, the report estimated, but transit cuts would drive values down by 0.6 to 0.9 percent.
The opposite is true for non-residential properties: The tax would drive the values of non-residential properties down by an average of 1.9 percent, but the transit cuts would decrease their value by some 1.1 percent.
“This analysis suggests that the potential service cuts would be far worse for the local economy than the parcel tax,” the report reads. “They would make it more expensive for employers to create jobs in the city, make workers less productive, and consume residents’ leisure time, hurting their quality of life.”
This presumes that the City could not find other ways to fund transit other than regressive taxation.
Someone should file an Ethics complaint against the Controller for electioneering on the City dime for releasing this report clearly designed to persuade the public in the lead up to the election.
“This presumes that the City could not find other ways to fund transit other than regressive taxation.”
Exactly this. My disappointment here is how the political leadership simply punted this on the ballot. Now followed by a symphony of violins. Where were the efforts to properly tax rideshares and robotaxis? Services which are heavily frontloaded with corporate billions,, using public resources, and ultimately trying to run public transportation out of town, no? And the little people are expected to hold the bag now?
And now they put their fingers on the scale before the election to scare homeowners.
First of all, Marc, it is very much not a regressive tax. Even if it raises tax on a fixed-income senior, it’s only about $80 a year, and it’s more than fair for two reasons: (1) that homeowner has been raking in a Prop 13 windfall for decades (2) seniors either pay reduced or zero fare on Muni. And for anyone else who is low-income, they’ll pay little to no extra rent even if the increased parcel tax gets passed through. And, again, low-income folks also are eligible for reduced to zero fares.
Second, please tell us, what kind of tax is the city allowed to levy that’s acceptable to you? Do you think the CCSF can just conjure a billionaire tax out of thin air? Or do you think it’s a good time to raise tax on businesses when our corporate tax base is still fairly tenuous?
Third, elected/appointed officials like the City or State Controller always do analyses of ballot or bond/parcel tax measures. Who even knows what you’re on about.
This is a better way to raise urgently needed funds than raising fares…again. And you know this. But you’re one of those self-styled ‘eco anarchists’ who thinks they’re down with the people while they gentrify working class neighborhoods and rail against supportive housing near their home.
Exactly this.
More “the moon will fall from the sky, a plague of locusts will eat San Francisco” chanting/drum beating from the vested interests.
The budget keeps going up a billion a year – we’re at almost 15 (17 if you include port and airport) for less than 850,000 people.
And we’re broke.
As if the cost of living in SF isn’t already traumatic enough – let’s add yet another 1% super regressive sales tax (Muni and Regional).
The rich don’t care. This will fall squarely on them that ain’t.
As for the parcel tax – everybody pays – not just the Lords of the land.
Expect this propaganda to become ever more frenetic the closer we get to the election with “reports” and dire prognostications coming out at an ever increasing fever pitch.
At $129 per home ($0.38/day), this is a no-brainer for not having to wait as long for the bus, or not being stuck in traffic behind riders that give up and use a car.
San Francisco has a boom/bust economy.
Currently we’re recovering from a bust.
It also will hinder how much we can use the boom.
The problem is not the money, it’s the immeasurable part of life, the overall societal cost.
I’m tired of regressive taxes being passed off as progressivism. I’m voting NO . People should be ashamed of themselves.
Transit is way more essential than permitting. City Hall should stop giving overpriced contracts on the down low for OpenGovSF and its staff and shift resources to getting people to jobs and activities which keep our City running.
‘Homeowners would account for 25 percent of the tax revenue, while commercial property owners would account for 75 percent.”
Tenants pay nothing? No passthru?
Measure allows up to 50% pass-through to tenants, up to a maximum of $65 per year.
Thanks for the info, Chris. Perhaps the article could make that clear.
No passthrough. How disappointing. I guess you’ll just have to find some other way to exploit your tenants and soak the poor. I’m sure you’ll come up with something if you put your mind to it. Maybe consult with AI.
Because $4,000 a month for a 1BR apartment isn’t enough? Watch out, tanking property values would be great for renters.
from one who frequents downtown market street.
what surface transit line has not already been cut to near nothing such that riders effectively have to pay more (after your 2 hour window expires) for less service?
i doubt workers downtown use muni as much as rideshares.
i doubt the extra revenue will be effectively used to improve our transit.
I doubt how much money is actually needed if ridership keeps climbing.
none of these questions were asked.
ML is playing the parrot here reporting nothing beyond the schity’s propoganda.
Muni ridership has largely recovered from prepandemic levels (weekend ridership has exceeded prepandemic levels).
This tax hike covers the “Free Muni for Under 19s” and the massive fare evasion which came from that policy. Also Muni has incredibly poorly designed ticketing structure that encourages universal fare evasion and that should be tackled before amy revenue measure.
Voters in San Francisco prefer steep tax hikes over simple common-sense reforms, which is unfortunate for everybody especailly Muni itself as the system will never live up to its potential without adequate farebox recovery.
I love how in every single article about Muni someone starts braying about fare evasion, with absolutely no evidence. SFMTA pays for fare-checking officers for public perception only, not because it’s recovering heaps of money. That’s because most people DO pay their fare, or are exempt. You don’t see a ton of people tapping on Clipper terminals because they get monthly/multiride passes through Muni Mobile, or they’re under age 19, or because they’re low-income senior/disabled or on SFMTA Access or Lifeline passes which don’t need to tap or are not Clipper-enabled. People who take transit pay their fair share. You know who doesn’t pay their fair share? Car owners who get free street parking for either zero $/day or pennies per day with a permit. Where’s the outrage about that?