CA: Muni report: Difficulty of getting voters to approve tax measure 'should not be taken lightly'

San Francisco budget officials have a roadmap to stanch Muni's $322 million deficit: put big tax measures on the ballot, and avoid cuts to transit service.

City Controller Greg Wagner laid out this approach Tuesday in a letter to Julie Kirschbaum, director of the San Francisco Municipal Transportation Agency. Addressing the "significant policy choice" that looms over San Francisco in the coming months, Wagner saw two possible paths: Either the city creates a new revenue source with sales and parcel taxes, or the SFMTA starts eviscerating bus and train service.

"With San Francisco nurturing an economic recovery that is slowly but noticeably gaining momentum, service cuts at the level needed to address Muni's financial deficit could be a significant setback," Wagner wrote.

His letter marks the last chapter of the Muni Funding Working Group, a task force comprising union leaders, transit advocates, city supervisors, Chamber of Commerce members, and a top staffer from Mayor Daniel Lurie's office. This array of interest groups met for months to discuss the deepening financial predicament for transit in San Francisco, brought on by stagnant ridership, declining downtown parking revenue, slow growth in the general fund and exhaustion of COVID relief grants.

After many brainstorm sessions, the working group unveiled six packages, each bundling possible cuts and revenue generators to fill the $322 million gap. The most popular set of ideas, called Package A, relied on a potential regional ballot measure and a local parcel tax for $260 million of the funding, with new parking fees generating another $20 million, and a mix of cost savings to cover the rest.

Wagner stopped short of endorsing these proposals. But his staff did note, in a report attached to the letter, that members of the working group "overwhelmingly supported" patching the deficit by raising revenue rather than by slashing service. The controller's report also found that Muni Funding Working Group members were "generally open" to parking fee or citation increases.

Though working group members coalesced around a common vision and a shared set of priorities, getting the public on board is a different challenge, Wagner conceded.

Asking taxpayers to dig in their pockets, "particularly in a time of uncertainty, should not be taken lightly," the controller wrote in his letter. His staff's report indicated that the city doesn't yet have a contingency plan if voters reject the new taxes. All the proposed Muni service cuts and parking fee hikes would add up to $222 million, leaving SFMTA $100 million short, and reliant on "less popular solutions," the controller's report said, including more dramatic gutting of service.

Despite the stakes, Kirschbaum struck an upbeat tone in a statement Tuesday.

" San Francisco's future depends on reliable, accessible public transit," she said, "and this report shows what's possible when advocates, labor and business leaders, and policymakers come together with urgency and purpose."

The controller's report builds on a transit-funding campaign already underway in the state Legislature, led by Democratic state Sens. Scott Wiener, of San Francisco, and Jesse Arreguin, of Berkeley. Wiener and Arreguin have co-authored a bill, SB63, that would enable three Bay area counties to put a transit revenue measure on the ballot in November 2026. Additionally, Wiener successfully lobbied for a $750 million loan in this year's state budget to tide over Bay Area transit agencies until their fate is put to voters.

"We're going to have to make the case to the public about why it's the right thing to do," Wiener said, referring to the trade-off of higher taxes to fend off transit cuts.

He remains staunchly optimistic. Muni ridership has picked up in recent months, as have the bus and rail system's customer service ratings.

"I know San Franciscans really get it," Wiener said. "San Franciscans understand how important Muni is for our city."

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