S.F. Mayor Lurie's idea to save Muni: Raise property taxes

San Francisco Mayor Daniel Lurie has laid out a new strategy to save the city's transit system from financial collapse: Raise property taxes.

The mayor introduced the concept in a letter he sent Tuesday to the city's director of transportation, Julie Kirschbaum.

"We believe that a parcel tax is the best mechanism to generate the level of funding needed to support Muni service and that it can be structured in a way that is fair and affordable," Lurie wrote, providing the most detailed picture to date of the Muni ballot measure he first pitched in March.

His proposal comes at a crucial moment for the San Francisco Municipal Transportation Agency, which is closing in on a $322 million annual deficit that would start next fiscal year, absent an economic lifeboat. Riders have gradually returned since the pandemic, but not at the level that Muni saw in 2019. At the same time, state and federal COVID relief funding has largely dried up. The proposal was first reported by the San Francisco Standard.

Although state lawmakers set aside a $750 million loan for Bay Area transit — some of which would go toward shoring up Muni — the agency is still facing the prospect of widespread cuts. Aware of the stakes, political leaders and advocates are rallying to support both Lurie's measure and a regional sales tax to fund Muni, BART, and other systems. But even if both measures pass, the money wouldn't flow in until fiscal year 2027, and it wouldn't be quite enough to sustain Muni's operations.

Lurie's letter coincided with an all-staff memo from SFMTA's chief financial officer Bree Mawhorter, who instructed the agency's divisions to trim 5% to 7% of their budgets. The 5% reduction is mandatory, Mawhorter said, but she is asking for the additional 2% to be slashed to create a contingency fund.

"You know as well as anyone, a safe and reliable Muni is essential to revitalizing downtown San Francisco, bringing customers to our local small businesses and helping our kids get to school," Lurie wrote to Kirschbaum, appealing to her directly while conveying a message to all San Franciscans.

Whether these impassioned statements will persuade voters to pay higher taxes is always an open question. But some political consultants have already praised Lurie for what they say is a shrewd move.

"Pursuing a parcel tax (in San Francisco) will complement the regional sales tax and provide balance" by using two different mechanisms, said Jeff Cretan, an advisor for the regional sales tax effort. Cretan noted, moreover, that San Francisco voters have a history of approving taxes — including property taxes — for many civic priorities, among them city college, teachers' salaries and restoration of the bay shoreline.

To Lurie, public transportation constitutes another urgent need. He said in his letter that deep service cuts to Muni would "pose an existential threat to San Francisco's recovery."

Still, he encouraged Kirschbaum to gather community feedback and continue holding her agency accountable. SFMTA has already eliminated 500 positions, decreased budgets for travel and work orders, and made its technology more efficient. Lurie called for even more internal savings, knowing the city must build trust with voters to persuade them to open their wallets.

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