The first of three $1 toll hikes on the Bay Bridge and six other state-owned Bay Area bridges will take effect as scheduled January 1, but no money will be flowing to regional transit agencies any time soon.
BY DAN ROSENHEIM
Published: January, 2019
The first of three $1 toll hikes on the Bay Bridge and six other state-owned Bay Area bridges will take effect as scheduled January 1, but no money will be flowing to regional transit agencies any time soon.
Meeting in mid-December, the Bay Area Toll Authority voted to place all funds raised by the toll hike into escrow pending the outcome of two lawsuits against Regional Measure 3. It’s no small amount of money.
The toll increase, which was approved by voters in June 2018, had been expected to produce roughly $125 million in additional operating revenue for Bay Area transportation in 2019, an annual amount that would grow with two additional toll hikes in 2022 and 2025 to total almost $900 million in new cash flow during the first five years.
Ferry service operations alone have been slated to receive $10 million in 2019, with incremental increases of another $5 million in subsequent years. So ferries stand to gain roughly $100 million in new cash flow during the first five years of RM3.
But there’s actually far more funding than this at stake because transit authorities expect to bond against the toll hikes, potentially raising billions of dollars in new money for capital projects on top of the operating revenue generated by the tolls.
RM3-engendered bonds have the capacity to raise as much as $4.5 billion for regional transportation capital projects, with the Water Emergency Transportation Authority (WETA) alone expected to raise $300 million in new capital for ferry service.
WETA wants to use the additional bond money for badly needed expansion —including the addition of summer ferry service, new boats and a new ferry terminal for San Francisco’s burgeoning Mission Bay district.
“Those projects depended on new capital generated by RM3,” said Nina Rannells, WETA executive director. “Now they are all in jeopardy.”
The legal actions seeking to overturn RM3 were filed in San Francisco Superior Court by Randall Whitney, an East Bay businessman, and by the Howard Jarvis Taxpayers Association. The suits target both the state legislature, which approved a bill enabling RM3, and the Metropolitan Transit Association’s Bay Area Toll Authority. The litigants claim that the RM3 toll hikes are actually taxes, not fees, and that they failed to receive the two-thirds approval from legislators and voters required for new taxes under Proposition 13. (RM3 was approved by 55 percent of voters in June 2018.)
Specifically, opponents cite an article in the state constitution that suggests a “fee” must be used to benefit those who pay it. Thus, a bridge toll hike might be considered a fee if it were used solely to benefit drivers on the bridge, but it becomes a tax if the money is used elsewhere.
Proponents of RM3, however, argue that spending some of its revenues on other forms of mass transit, including ferries and rail service, provides a direct benefit to drivers by reducing road congestion.
“It’s a bit like arguing that fixing a leaky pipe has nothing to do with saving water,” said Jim Wunderman, president and CEO of the Bay Area Council, a big RM3 proponent. “Bay Area bridges are swamped with traffic. Getting commuters out of cars and into mass transit provides direct benefit to everyone who uses the region’s toll bridges.”
Dates have yet to be set for hearings on the litigation; meanwhile, the new toll monies will be deposited in a trust account at Union Bank and remain there until the litigation is resolved.
