Proposition 26 Poses Serious Threat to Bay Area Transportation Funding

Proposition 26 flew under the radar of many California voters. With so many campaigns, measures, propositions, and candidates vying for our attention during this mid-term election year (Meg Whitman, Prop 19, Prop 23, Don Perata, local bond measures, city council elections, etc. etc. etc.), Proposition 26 just wasn't a marquee cause. But its implications are likely to be disproportionately massive. In a nutshell, the prop redefines standard-issue local and statewide fees as taxes that require 2/3 approval before they can be levied. This means a lot of things to a lot of different people, but before your eyes glaze over, consider the case of TransForm, a nonprofit organization based in Oakland that advocates for accessible and sustainable transportation infrastructure. Prop 26's passing puts the kibosh on a few of the org's primary sources of funding, seriously limiting its ability to design and advocate for public transportation, bikeways, and pedestrian access. Learn how it works, and more about Prop 26, in this week's Eco Watch.

"Prop 26 Could Threaten Local Transit Funding"

The initiative requiring a two-thirds vote for fee increases could apply retroactively to the transit fees Bay Area voters just passed.

By Nate Seltenrich

To say that Oakland's TransForm is miffed about the passage of Proposition 26 doesn't do its disappointment justice. The non-profit advocacy group's efforts to develop public transportation, walking, and bicycling infrastructure took a potentially huge hit last week when the statewide proposition passed by 5.8 percent. Prop 26 redefines standard regulatory fees, many of which benefit transit projects, as taxes that require a two-thirds vote in the legislature or local elections. That much is clear. But what isn't so clear, and what would make the outcome even bleaker for TransForm, is if vehicle license fees that passed on Election Day in five Bay Area counties — including Alameda's Measure F — could be considered subject to Prop 26's new rules. It's a question that, even a week after the election, no one seems to know the answer to.

The proposition impacts three of California's most important transportation-funding mechanisms: vehicle registration fees, vehicle license fees, and local sales taxes. Barring the rare fee increase approved by a two-thirds vote, all three are essentially frozen in place as of the proposition's passing. "This will devastate transportation funding," Transform announced in a terse statement last Wednesday. "It will now be nearly impossible for cities, counties, and the state to raise needed funds to fix potholes, maintain bridges, and keep trains and buses running."

Measure F institutes a new vehicle registration fee, so if it were to pass in any future election, it would require at least two thirds of the vote. It came in just short of that last Tuesday at 63 percent, which has Graham Brownstein, TransForms's state policy director, a little concerned. The measure, which adds $10 to the cost of registering a vehicle in Alameda County, would generate about $11 million a year for maintaining city and county roads, relieving congestion, improving traffic technologies such as traffic signals and commuter information systems, and adding new crosswalks, sidewalks, lighting, and other improvements to pedestrian and bicycle travel.

Brownstein notes that proponents of Prop 26 could attempt to challenge the legality of the new fees in court. The Howard Jarvis Taxpayers Association appears to be planning to do just that, arguing that all five of them should be subject to the new two-thirds requirement. It's unclear if their argument hinges upon an item in the proposition's official language that seeks to make the change retroactive to January 1 of this year. Yet the clause doesn't specify whether it applies to local fees or just state fees, and there's some question as to whether it's even legal.

Rodney Brooks, chief of staff for Alameda County supervisor Keith Carson, agreed that there are no easy answers. The county has experts looking into the issue, he said, and there is some concern about Measure F. However, he added, the measure has an important argument in its favor: thanks to a clause included specifically to counteract a potential challenge from Prop 26, it was certified immediately after polls closed on Tuesday, while the proposition didn't go into effect until the next day.

But lawyer Steve Wallauch of Alameda County lobbyists Suter and Associates wasn't sure if the addition of the day-of clause provides bullet-proof protection. "If it's challenged in court, I think they feel pretty confident about it, but you never know what the court's going to decide." And if the proposition's retroactive clause were ruled legal, the date of Measure F's certification would be a moot point. "I don't know if anyone knows anything definite on Prop 26 yet," Wallauch said.

Heidi Pickman of the No on 26 campaign joined the chorus of uncertainty regarding the new local fees: "We think the ones in this election will stay, but we're not sure," she said.

All of which is enough to justify Brownstein's apprehension. The challenge of identifying which fees are impacted and which are not, he said, particularly on the local level, is "going to be a very long, very messy fixture in this post-26 landscape. And I don't think anybody knows the full extent of how this may affect our communities and our state. But it certainly isn't a pretty picture."

Transportation funding is just one of a huge number of revenue streams threatened by Prop 26. The new law, which is written into California's constitution, makes it far more difficult for local jurisdictions and the state to do things like charge entertainers for extra security needs, charge restaurants to cover health inspections, and charge utility companies who open up roadways for the eventual cost of repaving.

The effect on the environment is likely to be particularly pronounced. Prop 26 turns oil recycling fees imposed on oil companies and hazardous materials fees imposed on chemical businesses into taxes requiring a two-thirds vote. The oil and gas industry lead all others in funding the Yes on 26 campaign, with Chevron alone contributing $3.75 million. Now that the proposition has passed, instituting any additional pollution-related fees is likely to be costly and time-consuming.

"How all of that plays out is anybody's guess at this point," Brownstein said. "This really does threaten the ability of communities to function."


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