Palo Alto’s support for a countywide sales-tax increase to pay for an extension of Bay Area Rapid Transit (BART) and a host of other transportation projects could hinge on a single question: What’s in it for Caltrain?
The City Council raised this question in a letter to the Silicon Valley Leadership Group, an advocacy group spearheading the tax measure, which would raise the Santa Clara County sales tax by a quarter cent for 30 years. The group estimates that the tax will raise about $3.5 billion for transportation improvements, including $1.5 billion for the extension of BART to San Jose.
In the letter, which the council approved by an 8-0 vote Wednesday night (Mayor Nancy Shepherd was absent), Palo Alto officials argue that the sales tax increase should be raised to three-eighths of a cent, with the added one-eighth cent going to Caltrain improvements. These would include, most notably, grade separations along the Caltrain corridor, which city staff estimates would cost about $150 million at each crossing. Without the grade separations, “increases to Caltrain capacity may be negatively offset by increased auto traffic delays at Caltrain grade crossings,” the letter states.
“Caltrain is critically important to the overall success of Bay Area Rapid Transit (BART) by helping complete the regional public transportation ring around the Bay,” the letter from Mayor Nancy Shepherd to Leadership Group CEO Carl Guardino states. “Caltrain provides essential service to Silicon Valley, the economic heart of the Bay Area.”
The letter represents Palo Alto’s official response to Guardino’s request at a May 19 meeting that the city lend its support to the transportation measure. Guardino cited to the council a recent poll that found 73 percent of county voters would support a new sales tax to fund infrastructure projects in Silicon Valley. The $3.5 billion generated by the tax would be split roughly in three parts, with a third paying for BART’s extension to San Jose, another third paying for highway improvements and the remaining third paying for other services, including Caltrain. Guardino estimated that about $500 million would go to Caltrain improvements, a number that some on the council felt was too low given the proposed allocation for BART.
During Wednesday’s discussion, council members reiterated this argument. While they acknowledged that an extension of BART is a worthy project, they stressed the importance to concurrently improve Caltrain so that the two systems can be linked. Councilwoman Gail Price, who chairs the Policy and Services Committee, said she and her committee colleagues agreed during their May 20 discussion of the topic that support for Caltrain is critical.
“We felt very strongly that the Bay Area Rapid Transit (BART) system is also a very important part of the overall regional network but that in fact, its success and its ability to serve mid- and north-county in particular is very strongly tied to an enhancement of service and performance for Caltrain,” Price said Wednesday.
“We feel that the issue of Caltrain and connection to BART are very critical,” she added.
The council agreed that making the jump from a quarter-cent increase to a three-eighths increase would allow the county to improve both systems. Councilman Greg Scharff called the extension of BART to San Jose “very important,” but made the case for allocating a greater share to Caltrain, which he called “the spine of Silicon Valley.” To that end, he enthusiastically supported adding the one-eighth cent.
“By having the extra eight of a cent, we solve the issue of Caltrain for the most part,” Scharff said. “We get to have much more capacity, speed and efficiency.”
Though his colleagues largely agreed, Councilman Greg Schmid made the case for taking a more aggressive stance with the Leadership Group. He called the proposed letter a little “too polite” and said the city should request that Caltrain gets a share equal to BART’s, regardless of whether the higher tax rate would be pursued. Schmid proposed including the following sentence in the letter:
“Without a higher three-eighth cent tax rate, the share going to BART and Caltrain should be equalized.”
The goal, Schmid said, “is to outline as clearly as possible that Caltrain is as important for ridership as the extension of BART is to Santa Clara County.”
That proposal fell by a 2-6 vote, with only Councilwoman Karen Holman supporting it. Other council members advocated sticking to the original position of the letter and potentially revisiting the decision at a later date. Councilman Pat Burt said he was inclined to focus on advocating for a higher tax and consider next steps after seeing the Leadership Group’s response to the city’s position.
“What we’re requesting — if it was achievable, if it polled successfully and went successfully to the voters — would be truly transformative for Caltrain,” Burt said.
Klein was more forceful in rejecting Schmid’s proposal, calling it “bad psychology, bad negotiating tactics and really a nonstarter.” The city, he noted, is not in a deadlock situation and has nothing to gain from taking a tough stance with the Leadership Group.
“Many negotiations have to take into account what the other party wants so everyone’s interest is taken into account,” Klein said. “The main motivator of this is BART and the formula being suggested would not provide for the $1.3 billion that is needed for BART to be completed. By suggesting something that undercuts the very motivation (of) this private agency, I think you’re undermining our credibility.”
The council members are hardly alone in touting the virtues of an improved Caltrain. In its poll of 600 likely Santa Clara County voters, the Leadership Group found 73 percent of responders support increased Caltrain commuter rail service from Gilroy to Palo Alto. Meanwhile, 67 percent support the planned BART extension from San Jose’s Berryessa district to downtown San Jose and Santa Clara. More than 80 percent support improvements that would ease congestion on expressways, increase safety for walking and biking near schools and provide more transit services for seniors and the disabled.
I approve of raising taxes for the support of Caltrain, but not sales tax.
I have two reasons.
Sales tax varies from city to city and for big ticket items or for a large shopping trip, it does make people think about where they are going to buy an item. We are already shopping outside Palo Alto for affordable shopping and although Mountain View is also Santa Clara, Menlo Park is not. Sales tax is a very harsh way to raise money as an advertised price or a marked price may say $10, but the reality of what it costs at the register is very different and often comes as a big shock, particularly to visitors. Raising sales tax over the years makes the shock bigger because it is a percentage. When will sales tax reach its upper levels? Will it be 20%, or higher? I say this because when we see how it has raised over the past 25 years it is much, much higher.
Secondly, sales tax is something we can’t get out of. The only way to pay less sales tax is to buy a cheaper item or do without. It may seem fair that it is something we all pay, but it is a confusing tax and when budgeting for an item may also mean taking into account the sales tax, we are stuck.
I would much prefer an additional tax on gas. To begin with, a tax on the competition to Caltrain makes a lot of sense. Next, gas prices don’t show the amount of tax, they show the actual price you pay at the pump and that is what matters to consumers.
Rethinking the method of raising this tax money makes a lot of sense to me.
Raising the sales tax to pay for BART is throwing good money after bad. BART does not need to go to downtown SJ, almost all businesses are in north SJ where BART is currently planned and it connects to the light rail. Light rail which cost a lot of money runs at a snail pace in downtown SJ which made it useless when coming from south SJ to north SJ where business are. Actually we could have done with a cheaper option than BART by using a commuter train system from Fremont to SJ which has the tracks and the right of way. The sales tax was increased for BART twice so far, and we were told that was going to be sufficient to pay for it, and now we are being asked a third time for an increase. When are people in Santa Clara County going to wake up and realize that they are being fleeced.
>I approve of raising taxes for the support of Caltrain, but not sales tax.
I generally favor consumption taxes, instead of property taxes and income taxes. They spread the base, and help to head off notions of a free lunch.
I like sales taxes and utility taxes (based on usage). Utility taxes have the added benefit of promoting conservation.
Sales tax and gas tax normally effect the low income more than the affluent simply because they spend a larger portion of their income on food and gas.
I still believe that Santa Clara County residents are being duped for paying for BART.
>Sales tax and gas tax normally effect the low income more than the affluent simply because they spend a larger portion of their income on food and gas.
This should mean that lower income voters will reject tax increases, unless they are important for basic government projects, like infrastructure, because they will be directly affected by such taxes. This would force politicians to make a serious case for tax increases. It would also put on pressure to increase lower-end wages. I think this is a good thing. We need to leave the era of “tax the rich”, because it is a false notion of equality without pain, thus a more narrow tax base all the time, as well as an obfuscation of hidden transfers of the tax burden to the lower income earners (e.g. one tax they pay is low wages).
We need to get away from the “free lunch” notion of taxation, because it is not free, and it is dishonest.
> We need to leave the era of “tax the rich”
Great idea if you just want to increase our debt or wipe out any government or public space completely. As we have been herded, whether we wanted to or not towards this milieu the economy has gotten worse, the infrastructure has hollowed out and the middle class as been decimated – why are we still being urged to double down on broken?
Progressive taxes that economically affect people equally is the way to go. Then everyone can make a fair decision based on equal cost or inconvenience.
If you want to get some great and entertaining enlightenment on taxes, let me invite anyone with Amazon Prime video access to watch the episode of the Conservative debate show Firing Line entitled: A Firing Line Debate: “Resolved: That the Flat Tax Is Better than the Income Tax” – it’s free with the membership.
The debate participants are of course William F. Buckley Jr, Pete “Pierre” DuPont, economist Lester Thurow, Jerry Brown, Steve Forbes, George McGovern, John Goodman, Robert Kuttner and Steven Mann.
Of particular interest is Lester Thurow’s opening arguments, and Jerry Brown pragmatic stance that with our current … in 1995 … corrupted tax system, a flat tax is actually more progressive than the progressive tax we claim that we have but do not have. In other words the average American does not really get how ripped off they are by our current tax system that puts most of the pain on the lower and middle classes, while the extremely wealthy get the loudest platform to bellyache about the least inconconvenience.
The biggest issue this country, state and city will ever deal with is how to tax fairly, and how to check the unrestrained and growing power of wealth and political bribery.
We tax the rich more because they have the money, and as Tomas Piketty has proven they also have more influence and more ability to make more money – so that when we do not tax the rich and regulate for the public interest we end up losing our country. When we finally get it that there really is no counter argument to this like there was no real counter argument to smoking causing cancer, maybe we will still have time to save the country.
Until then these unqualified and disingenuous arguments about the put-upon rich being threatened and our jobs and prosperity being under attack when they are asked to contribute a tiny bit more – just realize they are lies and distractions.
Maybe the real cure for America and Palo Alto is a good series of math classes.
Caltrain keeps getting the short end of the stick compared to BART, even though only Caltrain benefits the majority of Santa Clara County residents. Given that they already tried a sales tax increase to cover the BART extension in the past (which failed narrowly), they simply want to mention Caltrain in the bill in order to get more funding for BART. While I don’t object to funding BART, it seems like we should be funding Caltrain more in order to bring its service up to BART quality.
We need to stop approving new taxes (for any reason) and start spending our current tax revenue more wisely. Every time we approve a new tax it is almost never rescinded and the next tax we approve just gets added on to that. We think each one is more noble then previous one, but enough is enough already. Stop the egregious public official salaries, benefits and pensions (everyone else has a 401k if they’re lucky or an IRA). We have some of the highest taxes in the nation, time to start using them properly.
> No more taxes
We would not need new taxes, new taxes are just debt from old taxes unpaid by the top 1% that are shifted to those with lower incomes. The billionaires hide like chickens among the hard-working millionaires – the people who work for their money and pretend to be as put-upon and economically affected as the people who really do work for their hard earned money.
If billionaires, like Mitt Romney, paid their taxes, the millionaires and under would not feel the pinch of their absence so hard and we would not have the debt we have now.
Clearly, giving billionaires more of less tax-free, percentage-wise status has not been good for the economy, the government, the middle class or just about any other measurable quantity in our country.
What you are perceiving, because of false propaganda as a call for new and more taxes is really the deficit from the rich using their money to put forth and lobby and installing their own government for their own benefit at all levels of our country.
Put the tax system back where it was and like a human with a huge weight lifted off their chest the country will begin to breathe again.
>Great idea if you just want to increase our debt or wipe out any government or public space completely.
A “tax the rich” model is a sucker model. The rich will spend much monies to avoid taxes, instead of investing those monies in productive outcomes. The middle class see something for “free”, even if it isn’t. Much better to have an honest taxation model…then the politicians will have to actually defend their spending appeals. If the middle classes think that such taxation is worth it, they will support it…after all, they have the votes.
Wait, wait, didn’t we already pay for a BART extension to SJ virtually no one in PA will use?
@CrescentParkAnon: Yes, I agree with you that many of the rich aren’t paying their fair share of taxes (just look at the fine Credit Suisse agreed to pay for helping rich American’s avoid taxes). But, the salaries and pension benefits of most CA public employees are outrageous and need to stop. I can’t make people pay their taxes or change public employee contracts, but I can VOTE NO ON ALL NEW TAXES! This is the only way change will come about.
> The middle class see something for “free”, even if it isn’t.
This is no more true of the middle class, or any other class than it is for the upper class … and probably a lot less.
We here in the state and the city know we are paying for our schools and roads. We see incompetence and waste but cannot do anything about it … that is not because of government or middle class greed … whatever that is, it’s because the body of government has been taken over by those who have used it to mold the society and economy to their benefit and what is not to their benefit just gets jettisoned, meaning so does anything to do with the people who need the support and infrastructure. Two paths to righting this are to take money away from those who have enough that they can use it to corrupt the public sector, and to return funding and strength to the public sector in order to grow the commons for the middle class benefit.
If people saw a proven fair tax system they would not feel divided about investments in the country.
Right now we are in what the 0.1% see as a sweet spot for them, where resources, expertise, labor and markets can all be gotten internationally at the expense of the American body politic, and of course they see no downside to this … because they are not taking their jobs or social positions seriously at all, what with the whole greed is good mentality. They will prosper even if we were get absorbed by China completely, or so they think.
So, when this finally evens out and the US is a hollowed out shell full of people with no common language or culture except money and we have lost even the pretense of a “shining city on the hill”, then it is too late, and then we will understand the impossible temptation we gave the 0.1% to trade the country for baubles.
Endless rise in taxes…fees…it is too much. Add them all together and there should be no need for ANY increases.
We have exhorbitant property taxes already and expect a rise with Prop AA if it passes, (which I hope it does not as it is not justified in any way, shape, or form)and we are told we have rising property values and to expect a raised assessment.
We are NOT all “billionaires” – THOSE folks cleverly offshore and protect their assets, have trusts, pontificate while donating appreciated stock whereas if WE donate something, it is cash out of our pocket and affects us.
Here in California, the middle and upper middle classes are being taxed to the hilt. It is outrageous. The only solution seems to be to go to work for the government which offers perks, excessive salaries (in some cases) and lavish retirement and medical schemes that most of us don’t receive in the “real” world.
Pretty soon sales tax around here will be – what 10%? – that will affect things like auto sales (yeah, I know, NOT for the BMW crowd, but for many of us). We already drive old cars.
@no More Taxes, Midtown —
Thanks for your dose of common sense. The problem is some voters vote on a union-dictated slate or do NOT use the barest minimum of common sense around here.
Please help to try to get peoples’ attention to these crucial matters of political corruption and to VOTE sensibly.
@anonymous:
Unfortunately you are right. As long as the call for new taxes includes children, schools, mass transit, vets, elderly, or the homeless, people will blindly vote yes it as they think they’re being noble or something. Truth is these new taxes will just free up more money to pay these ridiculous public employee salaries and benefits. Please people, don’t be duped by this, just vote no.
The Federal Transportation Agency has always recommended against extending and funding BART to San Jose and yes Santa Clara voters approved a 1/8 percent sales tax in 2008. The tax mysteriously passed after voting day poll counts showed the measure failing by large numbers but somehow garnerd the bare minimum number of late votes to pass. In 2008, Santa Clara County officials promised the new tax would more than cover the extension and operating costs. The new tax proposed by the Silicon Valley Manufacturing Group (or the Silicon Valley Leadership Group as they now like to be referred to) has now proposed a 1/4 cent sales tax to cover employee costs and repairs. Repairs for a rail system that hasn’t even been built? and employee retirement costs for employees that have yet to retire? The SVLG has supported every new proposed tax measure in Santa Clara County since their inception. Why wouldn’t they? Tax the workers and not the companies who created the mess.
Currently, Santa Clara County motorists pay the highest gas tax in the nation ( 72 cents for each gallon) with billions going to local mass transit and roads. Think you have a good deal because you drive an electric or hybrid vehicle? Current legislation proposed and gaining politician support will initiate a measure to tax all vehicles based on miles driven with taxes to be collected as a vehicle registration fee. The joke is on all of us. What a pity!
While local motorists may pay the highest gas tax in the nation, it is still way too low. It generates billions of dollars, but not nearly enough to cover the cost of maintaining our highways and transportation system. If the federal and state government won’t step up and do what it takes to cover the costs, we will continue to see local initiatives like this one.
Fact: sales tax is a regressive tax. This means that it hurts the lower incomes more than the higher ones, because a greater percentage of a lower income is spent on taxable items. Luckily there is not tax on food in California. I couldn’t believe when I was in Georgia and Alabama that they tax food. So, I suppose, actually in our area, low incomes pretty much all go for food and lodging, so probably not that much does go for sales tax.
Yippee! Can we do another one of those 100% lifetime health benefits for part time employees and their dependents again?
Seriously, whatever happened to the concept of fiscal responsibility?
@Donald:
The only reason the taxes aren’t enough is because of bloated employee benefits and salaries.
Other states do a much better job with freeway miles per dollar even accounting for the higher traffic. And we don’t have the impact of snow (for the most part).
W e j u s t a r e n ‘ t e f f i c i e n t.
Here’s an idea – instead of increasing the tax percentage, demand that Caltrain gets its fair-share from the last tax and then has a greater share of the proposed tax.
No – let’s just tax more. Keep it up and no one, I mean no one, is going to vote for any tax increase…then you’re stuck with no funding at all.
Brilliant.
Why can’t the proposal be to get rid of CalTRain and replace it with BART. Caltrain noise is horrendous! Clearly those who keep rabbiting on about supporting it either don’t live near it (lucky you for being so RICH) or don’t take it. There service is subpar (if you are going to runs commuter rail can you please model it after a successful model? Sorry, The Bay area is not that unique) Or run the darn thing underground so people stop getting killed or playing chicken with the level crossings!
>Fact: sales tax is a regressive tax. This means that it hurts the lower incomes more than the higher ones, because a greater percentage of a lower income is spent on taxable items.
That argument works, as well, with BART tickets, movie theatre tickets, gasoline taxes, sin taxes (e.g. tobacco and booze), bridge tolls, traffic tickets, etc. Then there are all the indirect (hidden) taxes that are embedded in other everyday expenses like rent (higher due to property taxes), unemployment due to businesses moving away to lower tax places, lower wages at the lower end, because upper middle class people cannot afford to pay more (partially due to high income and property taxes)…etc.
A more honest taxation would be a direct consumption tax, fully disclosed on all bills and receipts. I like a VAT, in lieu of income/property taxes, as long as it is fully disclosed, because it has an internal enforcement mechanism at each level.
CalTrain and BART are effective public transportation models. The ticket price is important, but not sufficient to maintain the system. The best way to support it is with a broad-based consumption tax, one model being the sales tax.
Once the lower-end wage earners realize that there is no (apparent)free lunch, they will get more active in the electoral process.
Raise gas tax. Not sales tax.
Compared to Europe, our gas transportation tax is ridiculously small. As of April this year, Fed tax is 18.4 cents/gallon and California tax is 52.9 cents/gallon. The fuel tax in Germany, for instance, is $2.43/gallon and that doesn’t count the German 19% value added tax. I’m not advocating taxes that high. Just a small increase in transportation gas tax rather than sales tax.
We can subsidize alternative transportation with gas tax dollars and help shift commuting to the train and reducing unnecessary car trips.
I’d like to see a gas tax that would go up as gas prices went down. This would stabilize pump prices. So if there were an oversupply of gas, it would normally drive down the pump price. But for every penny the market price dropped, we could add a penny of tax. But don’t reduce the tax when gas prices go up. Limit the overall percentage allowed to provide an upward limit on the tax.
As gas taxes rise, assuming the same supply/demand ratio, the oil companies could not raise the gas price easily. Over time, we could pay the same amount at the pump but more would go towards our taxes as less would go toward oil companies.
>Raise gas tax. Not sales tax.
Each are consumption taxes, which is a good thing, IMO. However, if only the gas tax is used, consumer prices will rise, because transportation is a critical part of the supply chain. I think it is better to be honest about direct and indirect taxation.
Utility taxes (based on usage)should be a big part of the mix. I have cut way back on my water usage (allowing my lawn to go brown), due to the drought, yet I see some people with very green lawns…they should be taxed on that water usage. Same thing with people who own electric vehicles…they should be taxed on that electricity consumption.
In general, the tax base should be broadened, not narrowed. Nearly everyone needs to feel the direct pinch of taxation, in order to make rational choices.
@I hate caltrtain noise:
In comparison to the very quiet Caltrain, the noise from BART is like being next to a train wreck. I speak of course, of the noise made by your savings being sucked out of your pocket. BART (I prefer to call it Fast Area Rapid Transit) is one of the most financially inefficient transit systems on the planet, and it very possibly takes the top spot in that regard. In addition to excessively high fares, the expensive coaches and traction motors (imported from France, yes France!) are constantly breaking down. And the sales tax hurts everyone. It costs well over $2M per mile of BART track and is horrendously unreliable to boot.
We should have gotten rid of BART in 1980 and replaced it with Caltrain. Much less expensive to build and operate. And no sales tax penalty.
I believe that a previous article indicated that most of the previous sales tax revenues could not, or would not, be accounted for by Silicon Valley Leadership Group who backed the current sales tax and now this one. The logic that CalTrain will get more funding from a sales tax with what appears to be no accountability this far is rather far fetched. I will vote no.
If Caltrain needs funds to do grade separations, and funds are only for that, I will vote for that.
A sales tax promising funds to all interested parties and then diverting most to BART, the regional black hole for transportation dollars will not get my support.
Oh, brother. Enough! Throwing money at problems is rarely the ideal solution, and notice how it always leads to the need for more, more, more… Let’s all vote NO!
Public transportation needs to be supplemented with government funds, ie taxes. It is ridiculous to expect a first class service from fares alone.
Public transportation, and in particular Caltrain along the Peninsula, is something we all benefit from and its improvement will benefit us more.
Each Caltrain passenger is at least one car off the road for the majority of that commute. Each Caltrain passenger means that our school teachers, dentists, etc. are in their work place on time and not stuck in traffic. You may never ride the train yourself, but your expectation is that your groceries will be freshly delivered to your grocery store and your UPS package will arrive on time, are all dependent on those that need to use public transportation to be able to do so.
We need (and deserve) a better Caltrain service. We need government funds, i.e. taxes, to pay for it.
Now discussing how to raise taxes and use them wisely is valid. But expecting Caltrain to be self supporting is not valid. We all benefit from good public transport.
“Seriously, whatever happened to the concept of fiscal responsibility?”
Fiscal responsibility is a foreign concept to those in government. Just look at all the Palo Alto projects that were/are over budget. Start with the Homer Tunnel and project out to the current Mitchell Park Library fiasco.
There’s no accountability, so why should we trust them?
Remember when HSR was on the ballot and Yoriko Kishimoto (then a council member and on the VTA board) said we should all get behind it? “The system is expected to cost $45 billion to build, with annual operating costs of $1.6 billion when it is fully up and running. … The operating costs are expected to be more than offset with annual passenger revenue of $3.6 billion.” http://www.paloaltoonline.com/weekly/story.php?story_id=10358
The current cost estimate is $100B – and why should we believe that? http://blogs.kqed.org/newsfix/2011/12/07/as-the-high-speed-rail-debate-rages-on-stanford-historian-becomes-a-critic/
Keep in mind that there was a similar tax in Palo Alto a few years ago that was supposed to go directly to CalTrans for CalTrain–and their spokesman does not know what happened to it, apparently they never got it. So, where did it go?
I don’t have the answer for that one, I can only guess, but let’s NOT go there again (ie, learn from past mistakes).