Silicon Valley BART Faces $12.7B Crunch as Voters Pass RTM and Prop 3

Even as Bay Area and statewide voters approved multibillion-dollar tax measures to stabilize public transit operations and education budgets this week, transportation officials revealed that rising construction costs and remaining structural deficits will test agency finances for years to come.

Silicon Valley BART Extension Exceeds $12.7 Billion Target Ahead of 2028 Tunneling

Officials at the Santa Clara Valley Transportation Authority (VTA) disclosed this week that the four-station, 5-mile Silicon Valley BART extension to downtown San Jose and Santa Clara is no longer on course to meet its $12.7 billion budget target—up from an initial 2014 projection of $4.7 billion and a 2026 opening date—ahead of a full board presentation in December, according to San José Spotlight. VTA chief megaprojects officer Tom Maguire and San Jose Mayor Matt Mahan noted that while work recently finished on the West San Jose launch structure to bore a 5-mile, 53-foot diameter tunnel starting in early 2028 toward a 2037 service target, cost escalation from tariffs, data center construction competition, and higher energy prices—alongside an existing $700 million federal grant shortfall from the Biden administration—may require phasing stations or evaluating interim light rail. Santa Clara Councilmember Suds Jain, a VTA board member, criticized the agency for waiting until now to brief the board on the budget gap.

Voters Pass 14-Year Proposition RTM and 15-Year Proposition H as Structural Deficits Persist

Across the Bay Area, voters approved Proposition RTM by 61.5% to 38.5% (698,839 Yes votes to 437,799 No votes) and San Francisco's Proposition H parcel tax by 72.4% to 27.6% (126,168 Yes votes to 47,995 No votes) as advocates celebrated at The Cordial, according to The San Francisco Standard. San Francisco Municipal Transportation Agency Director of Transportation Julie Kirschbaum and Supervisor Myrna Melgar hailed the victory for Muni, BART, and Caltrain.

However, Proposition RTM's sales tax expires after 14 years and Proposition H's parcel tax lasts 15 years, leaving agencies to confront long-term remote-work ridership shifts. Even with the $310 million annually that Proposition RTM is expected to generate for BART, the rail operator still faces a $57 million budget deficit, prompting officials to study San Francisco County Transportation Authority congestion-pricing models (similar to New York City and Boston) and transit-oriented housing and commercial development on agency-owned land modeled on France and Japan.

California Voters Approve Proposition 3 by 59% to Make High-Earner Tax Permanent

At the state level, California voters approved Proposition 3 by a 59% to 41% margin, making permanent a 12.3% income tax rate on individuals earning over $371,000 a year and couples earning over $743,000 that was first passed in 2012, renewed in 2016, and scheduled to expire in 2031, according to The Almanac. Generating between $5 billion and $15 billion annually—up to 15% of total public education revenues—the measure was backed by California School Boards Association president Debra Schade of Solana Beach and California Teachers Association president David Goldberg, whose union invested nearly $60 million in advertising and canvassed more than 200,000 households. While opponents warned that permanent high taxes and the proposed 5% one-time wealth tax under Proposition 40 could prompt 200 wealthy residents to leave California, revenue from Proposition 3 flows into the Proposition 98 formula, which guarantees 40% of state general funds for education and directs 89% to K-12 districts and 11% to community colleges.