In a significant setback for Bay Area public transit agencies, an ambitious proposal for a regional tax that aimed to secure their long-term survival has been withdrawn due to disagreements over its scope and financial management. State Sens. Scott Wiener of San Francisco and Aisha Wahab of Hayward, the Democratic co-authors of SB 1031, announced on Thursday that they would not pursue the bill further this year, citing mounting opposition across the region.

The legislation, known as the Connect Bay Area Act, sought to authorize a November 2026 vote on a multicounty tax measure, potentially raising up to $1.5 billion annually. The funds would have been allocated to support train, bus, and ferry operations, as well as initiatives to integrate the 27 transit agencies in the area. The bill also aimed to allocate resources towards street and highway improvements.

Wiener expressed disappointment over the failure to build consensus on the measure this year, but emphasized his commitment to crafting a new plan to address the escalating deficits and potential service cuts faced by transit agencies. He projected that a new proposal could be brought to the Legislature early next year, with the hope of having a structure in place by late 2024 to provide financial assistance to operators.

The collapse of the bill comes as a blow to agencies such as BART, Muni, AC Transit, and Caltrain, which have been grappling with substantial revenue losses and decreased ridership due to the ongoing pandemic and changing work patterns. The Connect Bay Area Act was viewed as crucial in preventing severe service reductions and ensuring the affordability and reliability of public transportation across the region.

However, the complexity of the bill and differing opinions on various aspects led to widespread resistance. Progressive transportation advocates opposed the inclusion of funding for highway expansions, while officials from certain transit operators, including Caltrain, raised concerns about agency consolidation studies. Arguments also emerged over the types of taxes or fees the bill should allow, with opposition to a payroll tax from business groups and skepticism towards a sales tax from bill supporters.

One of the major points of contention centered around the "return to source" issue, determining the distribution of tax proceeds. The bill proposed that revenue be funneled through the Metropolitan Transportation Commission, with a guarantee that at least 70% of funds generated in a county would be invested in projects benefiting that specific county, increasing to 90% after five years. Santa Clara County officials disputed this arrangement, insisting on direct allocation without MTC involvement and expressing concerns about the impact of a new sales tax on existing transit funding.

The clash over control and funding ultimately led to the withdrawal of the bill after it reached the State Senate floor. Sen. Dave Cortese of San José, a Democrat, criticized the proposal as a threat to Santa Clara County, claiming that his suggested amendment to direct revenue to counties had been rejected. The bill was approved by the Senate with a 26-10 vote but was subsequently pulled from further consideration.

While disappointed by the bill's withdrawal, advocates for a robust transit tax measure see an opportunity to better communicate the potential benefits it can bring. Ian Griffiths, policy director for grassroots group Seamless Bay Area, emphasized the importance of developing a clear service vision and mapping out service improvements across the region to engage and inform voters.

As agencies like BART and SFMTA face daunting deficits in the coming years, discussions on the future of public transportation funding will continue. The need for a sustainable financial footing for transit remains paramount, and lawmakers and stakeholders will regroup to seek viable solutions to safeguard the future of Bay Area public transit.