SMART mulls early renewal of sales tax, reduction in fares for low-income riders

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The North Bay’s commuter rail service will consider a plan to reduce fares for low-income riders as part of a larger proposal from SMART staff to next year seek voter renewal of the 20-year sales tax measure that’s funded the system since 2009.

The moves come as Sonoma-Marin Area Rail Transit, which launched service in August 2017, assesses its long-term financial picture with an eye on restructuring debt and accelerating its delayed full build-out.

It expects to complete the southern-most station in Larkspur by year’s end, expanding its operating line to 45 miles of the planned 70-mile corridor. But guaranteed future funding in the form of an earlier tax renewal could help the agency speed up its extension of service north to Healdsburg and Cloverdale, according to SMART staff.

“The reality is we’re a transit operation, and we need to plan ongoing operations, we need to plan expansions,” Erin McGrath, SMART’s chief financial officer told SMART’s 12-member board at its Wednesday meeting. “We can’t have ballot box uncertainty in our future. We can’t have our revenues stopping in 10 years.”

Voters in Marin and Sonoma counties together in 2008 passed the quarter-cent sales tax that represents SMART’s primary funding stream. Measure Q will sunset in 2029, and the agency’s staff is recommending pursuing its renewal as early as the 2020 general election, ensuring, if passed by a two-thirds majority, funding for another 20 years through 2049.

SMART received $38 million in sales tax revenue in fiscal year 2017-2018. It used $16 million to pay down debt, leaving $22 million for other needs, including maintenance, operations and staff costs.

Through June 2018, SMART has received $289 million through Measure Q, but leveraged its fare box, competitive grant funding and other state revenue sources to pursue and build $550 million capital projects in its first 10 years of collection.

But rising operational and labor costs, escalating debt payments and the risk of an economic downturn affecting revenue are all set to put added pressure on SMART’s budget in the coming years, staff told the board at a workshop last week.

Fare revenue during the first year of service totaled $4.16 million, beating the target by about a quarter million dollars. But that funding represents only 12% of SMART’s annual revenue, McGrath noted.

Meanwhile, complaints from passengers have persisted about the cost of fares, board members acknowledged Wednesday. It could be impacting how many riders are using the service and where they fall in the socioeconomic strata, they said.

“I still get people who come up and want to scream at me that SMART is killing the taxpayers, and that it doesn’t have the ridership,” said Sonoma County Supervisor Shirlee Zane, a nine-year member of the SMART board. “We absolutely need to make sure that this train is for everybody. That’s why it’s called public transit.”

SMART offers a monthly pass for a flat rate of $200 for adults, with lower pricing for youth, seniors and riders with a disability. Without those discounts, it costs no less than $3.50 to ride SMART one way, with a maximum of $11.50 for the full length of the existing line between San Rafael and the station near Charles M. Schulz-Sonoma County Airport.

A similar-length trip aboard Caltrain in San Francisco with a Clipper card costs $7.70, and a single, one-way ticket on the Altamont Corridor Express is $10.25. An average BART ride in San Francisco and the East Bay costs $6.90 one way. Each of the other rail agencies receive different underlying tax subsidies.

SMART officials are eying a regional pilot program that could be used to provide 20% discounts to low-income passengers. The initiative, launching later this year on other Bay Area mass transit lines, would benefit riders with incomes below $25,000 — or about $51,500 for a family of four.

The Bay Area’s Metropolitan Transportation Commission is overseeing the program and would be responsible for reimbursement of forgone revenue.

Another potential concept floated Wednesday would allow children to ride SMART free — with the purchase of an adult ticket — on weekends and holidays when ridership is lower.

Both concepts were seen as ways to broaden ridership and secure voter support ahead of a decision that could lock in SMART funding for decades.

“Not to say that there isn’t an intrinsic public value in transportation, but I often hear from constituents, ‘Why are they continuing to be taxed to support a train that they can’t afford to go on?’ ” said Santa Rosa Vice Mayor Chris Rogers, who joined the SMART board in February. “The introduction of a potential program for folks who are living under the poverty line will help to alleviate that to a certain extent.”

The SMART board is expected to vote on the proposal to seek renewal of its tax funding at the next regular meeting on April 17. The public is invited to attend the 1:30 p.m. meeting at SMART headquarters in Petaluma, located at 5401 Old Redwood Highway North.

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

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