VTA may shorten SJ BART extension; big defict, tax slump looms
- Published Friday, February 27, 2009, by the San Jose Mercury News
BART to Berryessa: Sales tax projections force VTA to scale back plans
By Gary Richards
Faced with an alarming report that sales tax receipts, its main source
of revenue, will stay flat for nearly three decades, the Valley
Transportation Authority will recommend building BART only as far as
the Berryessa area of San Jose initially, and delaying the extension
through downtown San Jose.
In addition, recent state budget cuts coupled with the deep recession
have led to a projected operating deficit of $79 million for the
transportation agency over the next two years, and that could mean
bus and light rail fare hikes, service cuts and layoffs by summer.
The VTA met in a workshop Friday, and the news stunned board members,
especially coming after a successful campaign to pass a new one-
eighth-cent sales tax for BART last November. They knew the short-term
impact of the worst recession in seven decades would be severe for an
agency that depends greatly on consumer spending -- but no one could
recall a long-term projection this pessimistic.
Board members used words like "shocked" and "astonished" at the
report by consultant Bob Peskin, who analyzed sales tax projections
through 2036. Once inflation is factored out, his sales tax
projections are essentially a flat line.
"I'm really the bearer of not very good news," Peskin said. "It's
pretty terrible news "... and in real terms it means sales tax
revenues will never be greater than they are right now. That's the
most likely outcome, and that is a harsh reality."
Added VTA chair Dolly Sandoval:
"I didn't expect tax revenues to go up in the near term, but having
a 25-year projection where it's flat is quite scary, frankly. BART
to downtown San Jose is going to be a long time off."
The new calendar suggests the Berryessa extension could be done by
2018, but BART through downtown would take at least until 2025.
The 16.1-mile BART extension from Fremont to Santa Clara would cost
$6.1 billion, but the VTA estimates it can go as far as Berryessa for
$2.1 billion. It would take close to $4 billion to tunnel five miles
under downtown and complete the line at the Caltrain station in Santa
Clara, a cost certain to increase the longer the delay.
But according to the new report, the Measure A sales tax approved by
voters in 2000, which went into effect in 2006, will bring in around
$7 billion, about $4 billion less than first forecast. There's just
not enough cash to cover the cost of building the entire line by
2018 and the other dozen-plus transit improvements promised voters,
plus the cost of operating BART and other day-to-day needs.
Later this year, the VTA will formally apply for a grant with the
Federal Transit Administration for $750 million in assistance from
Washington, but that agreement will be only for the shortened line,
since that's all the VTA can now afford. The VTA will likely vote
this fall on whether to seek federal aid for the shorter line.
"The news coming out of D.C. and Sacramento is really bleak," said
Supervisor Liz Kniss. "Once again, I say the segment approach that
we pushed aside before is something we need to look at once again."
Kniss backed a shortened line last year but was rebuffed. This time,
no one was challenging her, even though the transit district will
move ahead with pre-construction studies to keep the hope of someday
completing the entire BART line alive.
"We definitely will do a phased approach," Burns said. "We are
committed to building the entire project, but that's farther down
Asked if a 2025 completion date was realistic for bringing BART to
downtown San Jose, Burns said, "That's probably in the ballpark."
The more immediate impact is on current bus and light rail operations.
The VTA is enjoying its highest ridership levels in nearly a decade,
and it has balanced its budget for the past several years.
But the recently approved state budget slashed transit aid by $536
million statewide, in effect abolishing for up to five years the State
Transit Assistance account, which provides cash to build and run
transit operations across California. That has left the VTA with a
gaping hole. It needs to approve a new two-year budget this spring,
and there seems little chance of balancing its financial ledger
without drastic changes, from higher fares to service cuts to layoffs.
"Everything is on the table," Burns said. "It has to be. We don't want
to look at a really quick fix that would carry us for three or six
months. It's going to be prolonged. Hopefully it doesn't get worse.
If it gets worse, then we are really in trouble.
"The good thing about what the state has done is that they cannot do
anything more to us. We are at the bottom there."
Contact Gary Richards at mrroadshow@... or (408) 920-5335.
The fax number is (408) 288-8060.
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