Faced with a potential $296 billion shortfall over the next decade to maintain and expand California's aging highway and transit systems, Bay Area leaders are throwing their full support behind an attempt to reduce the voter-approval threshold from two-thirds to 55 percent for transportation sales taxes.
In a memo to the Metropolitan Transportation Commission, director Steve Heminger said: "While MTC has supported legislative efforts to seek voter approval to lower the vote threshold for transportation taxes, with Democrats now controlling two-thirds of the seats in both houses, 2013 is the first year that the proposal has some real potential to pass the Legislature and be placed on the ballot."
If the proposed constitutional amendment by state Sen. Carol Liu, D-Pasadena, is approved by the Legislature, it would be placed on the statewide ballot in 2014 and could be adopted by a simple majority vote. The Legislature can place constitutional amendments on the ballot without the governor's signature.
The two-thirds mandate is an offshoot of Prop. 13, the landmark 1978 measure that rolled back property taxes and capped yearly increases until a property is sold. In 1995, the two-thirds requirement was extended to include taxes for transportation projects listed on the ballot.
Jon Coupal, president of the Howard Jarvis Taxpayers Association, said he thinks a ballot battle is possible, especially after Proposition 30 won last fall. That temporary measure increased the state sales tax rate for all taxpayers and the personal income tax rates for upper-income taxpayers.
"It could happen," Coupal said of the possibility that Liu's bill could be approved by the Legislature and go before voters. "Prop. 30 has whetted the appetite of those who want more government revenue, even though California now has the highest income tax and sales tax in America, and now they want to make it easier to impose more. But it's not good public policy."
Carl Guardino, head of the Silicon Valley Leadership Group, has led several sales tax efforts in the South Bay and supports a 55 percent threshold, but he said, "Past polling makes it look rocky."
The effort comes at a time when funding sources are drying up. Last year, the California Transportation Commission released a report saying it expects to get $242 billion in federal, state and local funds through 2020 -- about 45 percent of what is needed, or a $296 billion shortfall.
Stimulus funds have been spent to repave hundreds of miles of streets and freeways in the Bay Area, and a $20 billion bond measure approved by voters seven years ago to widen highways has also been spent.
In addition, the state gas tax has not been raised in nearly 20 years, and the increased popularity of electric vehicles and hybrid cars, along with higher federal fuel efficiency requirements, mean gas tax revenues are declining.
"There is nothing in the pipeline to fill the gap," said Russell Snyder, executive director of the California Asphalt Pavement Association. "It also doesn't help matters much that Congress can't seem to get it together on one of the most mom and apple pie issues -- transportation funding. It's a pretty grim scenario."
Several Bay Area counties have managed to pass transportation sales taxes despite the two-thirds mandate, and BART and AC Transit have enacted parcel taxes to support their systems.
In 2008, Santa Clara County voters approved by a razor-thin margin a one-eighth-cent sales tax increase to pay to operate the BART extension into the county. Without that tax, the Federal Transit Administration would not have allocated $900 million in federal funds for the extension, and work would not have begun.
Last fall, an Alameda County measure to raise sales tax by a penny failed by about 700 votes, killing funds for widening northbound I-680 through Fremont, replacing the I-580-I-680 interchange and upgrading BART.
Alameda County Supervisor Scott Haggerty said the narrow defeat provides a strong argument for changing the passage threshold to 55 percent.
"I still believe we live in a world where majority rules," said Haggerty, a longtime MTC board member. "You can talk a lot about what is the magic number for a threshold. I think 55 percent is reasonable."
Making matters more pressing, said Heminger, was the passage of Prop. 26 in 2010, as it applied the two-thirds requirement to virtually all forms of transportation revenue that might be pursued at the local level -- such as vehicle registration fees.
"This hurdle only exacerbates the funding shortfalls," Heminger said.
Staff writer Denis Cuff contributed to this report. Contact Gary Richards at 408-920-5335.
The following transportation measures all narrowly failed to win the two-thirds vote needed for passage.
Source: Metropolitan Transportation Commission