State budget includes $750 million in loans to keep Bay Area transit agencies running while new tax sought

Top California Democrats say they ve averted a worst-case scenario for struggling Bay Area transit agencies but only for now Tucked into the state billion budget agreement that Gov Gavin Newsom signed last week is a million loan for four local transit agencies to keep operating while they face massive deficits The loan will be divided between BART AC Transit in the East Bay Caltrain on the Peninsula and Muni in San Francisco Lawmakers are expected to nail down the terms this summer Related Articles Power outage interrupts BART system in central east Contra Costa County Clipper Card glitch results in free rides on fare hike day for countless agencies Letters Colleges runaway spending makes tuition unaffordable BART improves in safety cleanliness and satisfaction yet ridership recovery remains slow Oakland is making progress filling potholes but injury lawsuits keep piling up Combined with the state s earlier billion bailout of Bay Area transit agencies the loan will prevent devastating amenity cuts through the end of state Sen Scott Wiener s office disclosed in a message last week We re happy with the outcome declared Stefan Elgstrand a spokesperson for East Bay Democratic state Sen Jesse Arregu n Republicans whose votes weren t needed for the majority Democrats to pass the budget weren t part of the talks Next year funding will run out from an emergency billion bailout Newsom approved in While stumping for short-term funding in May Wiener a San Francisco Democrat mentioned BART would be forced to cut stations and two entire lines lay off workers and hike fares by without the additional cash By fall lawmakers and agencies hope voters will approve a sales tax increase to keep agencies above water for the long haul However that plan is already facing a major political challenge and questions about its viability among an electorate anxious about affordability The four transit agencies combined are facing a forecasted million deficit primarily because they re short on riders BART the region s flagship train framework faces a million deficit in fiscal year in the - budget year In the East Bay AC Transit faces a projected million revenue shortfall in fiscal year - and in recent weeks tapped reserves that will rapidly run out Both agencies have made specific cuts A latest bill analysis warned of a achievable death spiral for regional transit Though Democrats lauded the agreement to keep transit agencies afloat questions persist about the loan arrangement which is less than lawmakers originally sought In May Arregu n lobbied for a billion statewide funding allocation for transit agencies not a loan Elgstrand revealed It s unclear how much of that assistance Bay Area agencies would have received In any circumstance a major bailout for transit was likely a longshot this year because of the state s own budget woes a billion funding gap that forced Newsom and top allies in the Legislature to pare back a key wellbeing care initiative for immigrants without legal status Sen Dave Cortese a South Bay Democrat who chairs the senate s transportation committee noted Wiener carried the loan idea across the finish line by flexing his powerful position as chair of the senate budget committee A spokesperson for Wiener did not respond to requests for comment this week Cortese explained he reluctantly supported the idea The number million seems random he disclosed And he expressed doubt that the beleaguered transit agencies will return the funding I m not overly optimistic that that ever gets paid back Cortese explained If you re having a fiscal cliff and there s no end in sight at what point do you pay back million right Spokespersons for BART Caltrain and AC Transit all announced the plan involves repayment of the loans We are grateful for this loan because it will prevent deep organization cuts from happening before local voters get to weigh in on the expected ballot measure and as transit agencies seek local revenues to fund operations mentioned Alicia Trost a spokesperson for BART Despite a sharp decline in farebox recovery and year-over-year sales tax revenue our transit district has consistently met its financial obligations to creditors announced Robert Lyles a spokesperson for AC Transit Looking ahead our ability to maintain this stability depends on securing sustainable funding sources However a spokesperson for Caltrain disclosed agency personnel haven t decided to whether to accept a loan While Caltrain has not yet determined whether it will take this loan it is hugely beneficial to have it available as an option reported spokesperson Dan Lieberman The long-term plan to avert a Bay Area transit death spiral hinges on two key developments that lawmakers will pass more regulation this year and that voters in would agree to a regional sales tax hike to fund masses transit Wiener and Arregu n are sponsoring SB which if passed would have voters in certain Bay Area counties decide whether to raise sales taxes by half a cent That would generate roughly million annually to be distributed between the four agencies The amount is in flux and would also depend on the number of counties that approve the tax We remain cautiously optimistic that East Bay voters will recognize the value of a sales tax measure that supports infrastructure and the essential transit services our communities rely on mentioned Lyles of AC Transit But that proposal is already facing political headwinds Cortese announced last month that there s tremendous liability to the plan ending badly because tax-weary Bay Area voters may not approve it A coalition of labor and environmental groups is already fighting the regressive sales tax idea and has commissioned polls suggesting voters would be more inclined to endorsement a tax on business activity which the group prefers But their proposal is anathema to business interests which would be critical to a voter persuasion campaign leading up to November The financial details of the newly-approved loans including how much individual agencies would receive are yet to be determined The required statute later this session shall at a minimum require full repayment of the loan principal with any agreed-upon interest rate pursuant to a clearly defined repayment schedule the state s budget bill reads Cortese noted the apparent plan is to give agencies the loans with interest Elgstrand reported lawmakers will hash out those details Obviously they re going to pay it back eventually Elgstrand announced