VV proposes tax increase to cover rising AC Transit costs
on October 28, 2008
By SAMSON REINY
Increasing gas prices have hit motorists hard in the last several years. The automobile, once a symbol of American ingenuity and prosperity, is finally taking a back seat to public transportation. It comes as no surprise, then, that AC Transit, like many other public transit systems, has seen a notable increase in ridership over the last four years.
But buses need gas too, and lots of it.
“We’ve seen a 55% increase in gas prices over the past four years,” said Clarence Johnson, spokesman for AC Transit, which provides service throughout the Alameda and Contra Costa counties. “Considering that we use 6.5 million gallons of gas a year, every ten-cent increase in fuel prices results in an additional $600,000 expense.”
In order to compensate for its projected $20 million shortfall next fiscal year, AC Transit’s seven-member board is urging adoption next week of Measure VV, which would double the estate parcel tax to help fund the bus system. If approved, the measure, beginning July 1, 2009 and extending until June 30, 2019, would increase the estate parcel tax to $96 dollars per year. It would supersede the current $48 parcel tax, which is authorized through 2013. Landowners from San Pablo to Hayward would pay the tax, regardless of whether they use AC Transit. Properties that are tax-exempt, undeveloped, or vacant for at least six months of the year are not subject to the measure.
Among landowners interviewed recently about the measure, responses were mixed. “I’m always for the community giving more for public transportation,” said Carol Pierson, 63, president of a non-profit organization who owns a home North Berkeley but doesn’t use AC Transit. “People need to get to places.”
But one resident said the tax could be unfair to some. “Low-income homeowners would pay $96 a year, while affluent renters pay nothing,” said Merrillie Mitchell, a retired Berkeley resident. “At a time when people are losing their homes to foreclosure in record numbers, it is irresponsible to burden financially strapped homeowners with more taxes.”
Another landowner said he supported the measure but wasn’t sure about how everyone else felt. “For me, that kind of increase is not a big burden,” said Kejing Fong, 55, of Berkeley, a semi-retired computer engineer. “I’d like to help as much as I personally can. But I’m not sure about the financial situations of other landowners like the elderly. I can only speak for myself.”
“The board decided to spread the burden,” said AC Transit’s Johnson. “Whether or not people take public transportation, they are benefiting from fewer cars on the road, and it’s just more friendly for the environment.”
Taxes are what have traditionally kept AC Transit solvent. State and county taxation accounts for over 60% of the agency’s funding. And the state, embroiled in its own fiscal worries as tax revenues plunge due to increasing unemployment and plummeting home values, is cutting its support for the bus system. AC Transit was originally slated to receive $26 million for the next fiscal year through State Transportation Assistance Funds, but because of the recent budget crisis, the state is now only allocating $7 million. Johnson noted that these deep funding cuts from the state have been happening for the last four years.
On the other hand, bus fares, the most obvious source of revenue, comprised only 16% of AC Transit’s total revenue in the 2006-2007 fiscal year. When asked why the board didn’t implement fare increases, Johnson said, “We want to keep the bus affordable, especially for senior citizens, the disabled, and youth. A lot of people with lesser means depend on us. It would be especially hard on them to handle an increase right now.”
AC Transit commuters held similar perspectives. “I don’t think they should raise the fares again,” said Sewhan Jang, 34, who commutes daily from Richmond to Berkeley on the bus. “Maybe a small increase on monthly passes, but it’s already $1.75 when you pay in cash. That’s too much.”
Another commuter said she couldn’t afford another fare hike. “I feel like I’m not saving anything by using public transportation,” said Alexandra Rigaud, 35, a youth counselor who relies on AC Transit as part of her workday commute to San Francisco. “I can barely make ends meet now, and if they increase the price it will make things even harder.”
A student said rising ticket fares might decrease sales. “A lot of people take the bus because they don’t want to walk home, even if it’s just a 20-minute stroll away,” said Sarah Hamik, 14, a sophomore at Berkeley High. “But if they raise the fares, a lot of people would just walk home. They might end up losing money.”
And while rising fuel prices are the leading culprit in the projected shortfall, other escalating rates have also added to the financial pressure. The cost of employee pension plans have increased and health insurance rates have also shot up 40% over the past four years. “It’s one thing on top of another,” Johnson said.
Support for Measure VV is strong. A bevy of organizations have endorsed the parcel tax increase, including the League of Women Voters, the Sierra Club, the SF Chronicle and the Oakland Chamber of Commerce. To date, no groups have voiced opposition to the measure. “But given the nature of our economy as of late,” Johnson said, “it’s anybody’s guess.”
When asked what would happen if the measure didn’t receive the necessary two-thirds majority vote to pass, Johnson said it was ultimately the board’s decision. “But without the additional funding, we couldn’t keep the level of service the we have now,” he added.
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