CA: SMART tax renewal could get boost from state bill

April 22, 2024
SMART, which operates 45 miles of passenger rail from Larkspur to Santa Rosa, opened in 2017 supported by a voter-approved quarter-cent sales tax across the two counties that will expire in 2029.

Apr. 20—A critical sales tax needed to keep Sonoma-Marin Area Rail Transit alive could have a fresh path toward renewal under a new state bill.

SMART, which operates 45 miles of passenger rail from Larkspur to Santa Rosa, opened in 2017 supported by a voter-approved quarter-cent sales tax across the two counties. That tax expires in 2029, and in 2020, SMART failed to gain the required two-thirds approval for a 30-year extension, leaving the agency financially vulnerable.

The new legislation, by state Sen. Bill Dodd, D- Napa, proposes a voter initiative process that would enable petitioners to place a tax extension measure on the ballot themselves. The measure could be considered at a special election and would only require a simple majority vote for approval.

The failed tax measure in 2020 received a 54% majority in favor.

Dodd said SMART helps reduce gas emissions and provides transportation alternatives to driving on clogged highways.

"But its future is in doubt without maintaining this critical revenue source," Dodd said. "My bill allows the majority of voters to determine if we continue this essential and absolutely worthy rail line for generations to come. Past experience shows this is something voters want to do."

The bill, SB 904, which was introduced in January, cleared the Senate elections committee on Tuesday. It is now headed to the Senate Appropriations Committee.

Recent polling shows that of 642 responses from Sonoma County and Marin County voters, 65% indicated they would support a measure this November renewing the quarter-cent sales tax for 30 years, collecting about $51 million annually. About 30% said no. The margin of error for the survey is plus or minus 4%.

"So by those metrics, this is not a slam dunk by any means," Dave Metz, a consultant who produced the report, told the SMART board earlier this month. "For this measure to be successful it would require, I think, public outreach."

SMART officials have agreed the only viable option to avert financial collapse would be a renewal. However, the board hasn't decided when or how the question should go to the voters.

"That would really need to be a board decision, if there was support or interest in going in November," said Marin County Supervisor Eric Lucan, chair of the SMART board.

Agency staff said Dodd's bill was drafted in response to requests from constituents interested in ensuring the trains keep rolling.

" North Bay residents, as well as citizen advisory groups such as the Marin County Civil Grand Jury, have pointed out that local taxpayers have made a significant investment in a critical transportation system that needs to be preserved for future generations," said Julia Gonzalez, a SMART spokesperson.

Lucan said the two potential options for placing a measure on the ballot have different thresholds.

A voter initiative would require only a simple majority, compared to a two-thirds majority if submitted by SMART at a general election. However, the voter initiative would require collecting signatures on a petition.

"Gathering signatures across two counties is a significant task," Lucan said. "It would really be up to the voters as to whether or not they would want to pursue that, but it is important to keep it as an option for voters to protect and preserve their investment in the SMART rail line."

Even though SMART's financial future is cloudy, the board agreed in December that getting more riders on the train is more valuable than increasing farebox revenues.

To that end, the board approved a plan allowing passengers younger than 19 and older than 64 to travel for free. The program started April 1 and is set to expire at the end of June 2025.

Previous free-ride initiatives have paid off, and the agency's focus on ridership is producing some results.

Last year, SMART recorded its highest ridership numbers since launching, officials reported in January. The agency said it carried about 750,000 riders in 2023, a 4.5% increase over the previous record of 717,900 riders set during pre-pandemic conditions in 2019.

Eddy Cumins, general manager of the agency, said March ridership reached 67,421, a 26% increase over last March and 16% over the same time period in 2019.

This month, ridership numbers surpassed the last fiscal year total of 640,099. Staff is projecting that total ridership by June 30, the end of this fiscal year, will be at 825,000, setting another record, Cumins said.

Novato resident Mike Arnold, an economist who worked on the opposition campaign against SMART's tax renewal measure in 2020, said he remains skeptical about the agency, its strategies and its reporting.

"I would imagine that if SMART proponents attempt to extend the regressive tax with an initiative that circumvents the two-thirds requirement for passage in order to provide huge taxpayer-financed subsidies to the few that take the train, the agency would get even fewer votes," Arnold said.


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