Tolled to Death

The folks at the Metropolitan Transportation Commission (MTC) have something “exciting” in store for the residents of the Bay Area’s nine counties.  SB 595, authored by Senator Jim Beall of San Jose, will “give the voters the chance” to approve a $3 toll increase in all Bay Area bridges, except the Golden Gate Bridge.  The bureaucrats make it sound like an honor for the voters to be given such an opportunity to tax themselves. Apparently we should be thankful they granted us this chance to give the bureaucrats more tax money to waste.  We note also that the MTC voted recently to hike the toll increases faster than was initially suggested, and the measure was moved up to the June 2018 ballot, rather than the November 2018 ballot, so as not to “interfere with other local measures planned for November.”  The lust for “revenue stream” was just too much to resist.

RM3, as the bureaucrats’ dream is called, includes a smorgasbord of impressive-sounding projects: expansion of BART’s railcar fleet to accommodate its extension to Milpitas and East San Jose; further extension of BART’s Silicon Valley service to downtown San Jose and Santa Clara; extending Caltrain to downtown San Francisco; expanding transbay bus services and AC Transit’s bus rapid transit lines; a freeway connector from northbound US 101 to eastbound I-580 in Marin County; improving the westbound approach to the Richmond-San Rafael Bridge and the I-580/Richmond Parkway Interchange in Contra Costa County; construction of a direct connector between I-680 and I-880 in Fremont; upgrading the I-680/State Route 4 interchange in Contra Costa County, the I-680/State Route 84 interchange in Alameda County, and the US 101/State Route 92 interchange in San Mateo; upgrades to the Dumbarton Bridge Corridor and improve Route 37 in Marin, Sonoma, Napa, and Solano counties; extend the new SMART rail system to Windsor and Healdsburg; expand San Francisco’s fleet of Muni rail cars; and adding more ferries to the San Francisco Bay Ferry Fleet.  The MTC notes that Bay Area voters have twice approved bridge toll increases for regional transportation as if it were an expected and obvious “no brainer” for them to do so again.

A closer look at the improvements for RM1 in 1988 and RM2 in 2004 shows a definite and disturbing trend these regional transportation measures are taking.  RM1 funded the new Benicia Bridge, the Carquinez Bridge replacement, the new I-880/92 interchange, the widening of the San Mateo Bridge, the Richmond-San Rafael Trestle and deck, and the widening of Bayfront Expressway.  RM2 projects included the Transbay Transit Center, extending BART to Warm Springs, the e-BART extension to Pittsburg and Antioch and widening of Highway 4, the Oakland Airport Connector, I-80 HOV lanes, SMART rail extension, AC Transit Rapid Bus, San Francisco’s Central Subway, Transit Center upgrades and new buses, regional ferries, and the BART tube seismic retrofit.  See any pattern here?  RM1 ended up being closer to a user fee, where those who are paying for the improvements get some benefit from it.  RM2, on the other hand, as regional government began to creep into the Bay Area, clearly had an emphasis on mass transit, not road improvements, so it was motorists paying for benefits going to others.  This is otherwise known as taxes or wealth distribution—a recipe for bloat.  We are not surprised at some of the shabby accomplishments of RM2.  The Central Subway in San Francisco—millions over budget, years behind schedule, it will end in Chinatown rather than Fisherman’s Wharf (which would have been more logical), and riders will have to exit the subway in one spot and walk several blocks to catch it again.  Then there’s the Transbay Center, another bureaucratic fiasco.  It’s only a 4-story bus terminal but has gone from a budget of $1.189 billon to $2.259 billion.  It was supposed to be a state-of-the-art transportation hub and hailed as the “Grand Central Station of the West,” but already they are substituting cheaper building materials to cut costs, and The City had to cough up $260 million to bail out the project in an embarrassing effort to complete phase one of this project.  They say the entire project will be completed in 2024—we won’t hold our breath.  The Oakland Airport Connector is yet another example of failure and waste.  The estimated cost was $232 million, but the final cost was actually $484 million.  The cost of the AIRBART service used to be $3, but the fare for the BART extension is $6.  Even though Oakland Airport’s passenger numbers are rising as more airlines are flying in to Oakland, ridership on the Oakland Connector should be picking up, but it isn’t.  Ridership on the BART extension is lower than predicted as those going to Oakland Airport are increasingly choosing the convenience and cost savings of the voluntary economy (Uber and Lyft). 

So, what about RM3—is it going to be more user-fee based or tax-based?  Of the proposed projects, it is estimated that 62% will support mass transit, 31% will go towards roads and highway improvements, and 7% will go for bicycle and pedestrian projects.  When 69% is pegged for projects that have little to do with actual road work and those paying the “fees” are not those receiving the benefits, a 31% user-fee rates an “F” in our book.  If history is any indication, we can count on continued waste of toll payer “fees” by the MTC.  Where did the money come from for the MTC to purchase the palace at 375 Beale Street that is now the new headquarters for itself and other regional agencies that it rents out space to?  Toll fees.  Even an audit report by the State Auditor’s office questioned why the MTC bought a building that was twice the size of what it had before in Oakland.  The report also noted that the financial risk of being unable to repay all of the toll revenues significantly increased in May 2013 when the Bay Area Headquarters Authority announced plans to convert 101,000 square feet of the building into an atrium and building support space.  Since when was the MTC given the authority to jump into the real estate business and become a commercial landlord? Furthermore, by what right did the MTC invest toll revenues in risky ventures like interest rate swap investments?  In 2002 the MTC made an interest rate swap exchange deal with a Wall Street firm named Ambac, which was supposed to save the MTC millions of dollars for the toll payers.  Originally touted as a model way to obtain a marginally lower interest rate, after the financial meltdown in 2008, the MTC was forced to pay $104 million to cancel its interest rate swap with Ambac.  San Francisco Chronicle columnists Matier & Ross noted, “If you’re a bridge commuter, this might give you road rage—about a year’s worth of toll hikes, or $120 million thanks to a bond-credit swap gone bad.”  As a public agency entrusted with millions of dollars of toll fees, wasn’t the MTC supposed to act like a guardian of the public’s money and safeguard it carefully?  Is there any compelling reason to believe the MTC will be any more fiscally responsible  with the “fees” collected from RM3 than it was with RM1 and RM2?

We must point out one more disturbing trend in these regional measures that are popping up with more frequency lately.  RM1 and RM2 were only voted on by the voters in 7 Bay Area counties; however, RM3 will be voted on in all 9 counties (Napa and Sonoma will now “get the chance” to vote which they didn’t get earlier), and the 50% + 1 vote required majority will apply to all votes cast in all 9 counties.  Never mind the fact that in the last regional ballot measure ($12 parcel tax to “Save The Bay”), 4 of the 9 Bay Area counties did not get the required 2/3 vote to authorize the tax, yet it became the law anyway in all 9 counties.  So much for counties being the legal jurisdictions which answer to the voters.  Of course it’s the rural counties located furthest from the heavily urbanized counties like San Francisco and Santa Clara that are least likely to approve additional taxes and “fees,” but they’ll get stuck paying them anyway.  Never mind the fact that they are calling this extraction a “fee,” rather than a tax, which allows the measure to pass with only a simple majority rather than the 2/3 requirement for a tax when the largest chunk of the extraction will not go towards the roads.  Clearly regional government with its appointed bureaucrats and army of highly paid consultants is running amok in the Bay Area—and getting more powerful with each election.

Lastly in the huge and well-funded by special interests propaganda campaign that will be hitting the Bay Area over the next few months touting the benefits of RM3, you will hear little, if any, mention of the $1 million of bridge tolls which will go towards the creation of an Independent Office of the BART Inspector General.  After the first year of operation, the Bay Area Toll Authority “may increase the amount of funding allocated for this purpose.”  Why are we not shocked that more tax money collected needs another set of bureaucrats to oversee things?

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