Legal ruling could unleash delayed funding for Bay Area transit, road projects

A state appeals court has upheld a lower court’s ruling allowing a 2018 voter-approved toll hike on state-owned bridges in the Bay Area to stand, a move that could finally unleash up to $4.5 billion to pay for regional road and transit upgrades, including projects tied to Highway 101, SMART and Highway 37 in the North Bay.

A three-judge panel of the First District Court of Appeal in San Francisco issued its decision on Monday, siding with the Bay Area Toll Authority following oral arguments in late May. A planned appeal to the state Supreme Court, however, could further stall the funding and delay dozens of projects that depend on it.

The ruling goes against the Howard Jarvis Taxpayers Association and a Contra Costa resident, who together sued over Regional Measure 3, arguing it was a tax that needed a two-thirds majority and not a simple majority when 55% of voters approved it two years ago.

But the appellate court upheld the ruling of a San Francisco Superior Court judge, who in April last year found the toll increases represented a user fee, not a tax.

The legal victory was celebrated by Bay Area transportation officials, but tempered by an understanding that further funding delays could be in store under another appeal.

“Naturally, we're pleased by the court's ruling,“ Metropolitan Transportation Commission Chair and Alameda County Supervisor Scott Haggerty said in a statement. "While we were confident the election process the Legislature approved and MTC followed would again be supported by the court, we are even more excited to finally unlock the toll funds approved by voters and put those dollars to work on dozens of much-needed projects to provide both mobility and jobs throughout the Bay Area."

The court’s opinion becomes final in late July, and the plaintiffs must file an appeal to the state Supreme Court by Sept. 7, according to John Goodwin, spokesman for the regional toll authority.

Tim Bittle, director of legal affairs for the taxpayers association, said the group intends to appeal.

It is not yet clear, Goodwin said, whether the collected revenues from the three scheduled $1 toll hikes, which started in January 2019, could be disbursed before the state’s high court takes up the case, if it does.

“It’s ridiculously frustrating,” said Suzanne Smith, executive director of the Sonoma County Transportation Authority. “It seems like two courts have now ruled favorably, and all this means is greater delay, which typically means more expensive projects. So instead of getting work done, we’re waiting on the courts.”

The three Sonoma County projects guaranteed funding under Regional Measure 3 include: $120 million toward completing the Highway 101 Sonoma-Marin Narrows lane-widening; $100 million for Highway 37 improvements; and $40 million for SMART’s Windsor extension, which is slated to be finished by the end of 2021. Without those funds, however, none of the projects — nor the dozens of others in the Bay Area — can proceed, officials said.

“We have enough money to continue everything until December,” SMART General Manager Farhad Mansourian said of the 3-mile rail extension to Windsor. “The ruling itself is terrific. But if RM3 does not materialize and it’s appealed now to the Supreme Court, and the project runs out of state money and other money, now there is more cost for stopping the project and restarting it whenever that restart starts.”

The Howard Jarvis Taxpayers Association plans to petition the state Supreme Court to clarify what Bittle said are conflicting appellate court opinions, both from the First District.

“Only the Supreme Court can reconcile this conflict,” Bittle said. “To be honest, I expected to lose in the two courts that we’ve faced already, just because they’re not taxpayer-friendly courts. It doesn’t diminish my strong belief that our legal theory is sound, just based on my reading of the law, and I still believe that we have the better argument. My prediction is the Supreme Court will grant the review.”

Reached by phone Tuesday, Randall Whitney, the Contra Costa County resident who signed onto the lawsuit, said he had heard about the court ruling, but declined to comment until he had a chance to read it thoroughly.

Transportation officials remain hopeful the appellate court’s action Monday helps clear the way for road and public transportation projects to receive dedicated dollars sooner than later. The $1.2 billion Highway 101 lane-widening project needs the money to hit a projected completion date of the end of 2022 on the Sonoma County side, and 2023 in Marin County.

“We’re happy with the decision. It’s one step forward,” said Sonoma County Supervisor David Rabbitt, who sits on several public boards overseeing regional transportation. “There are a whole bunch of projects that need to get funded. It is the predicament we’re in because of this lawsuit. Legal proceedings just take a long time, and there’s already been two court trials, but now they’re looking for a third, so there’s a lot of bites at the apple, apparently.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or kevin.fixler@pressdemocrat.com. On Twitter @kfixler.