SF Transit, Street Improvements Could Get a Boost From Vehicle License Fee

San Francisco may be on course to receive significant new revenue for transit and street improvements in the coming years following the passage of SB 1492, which specifically permits the city to vote on restoring its local vehicle license fee to historic levels.

The legislation, which was signed by Governor Jerry Brown earlier this month, clears the way for the SF Board of Supervisors to introduce a ballot measure as soon as November 2013 to restore the local VLF to its pre-2004 level of 2 percent of the vehicle’s estimated value, up from the current statewide limit of 0.65 percent set by former Governor Arnold Schwarzenegger. The increase, if approved by voters, would bring in about $75 million for various city services, according to the office of State Senator Mark Leno, who introduced the bill.

There’s a very recent precedent for a successful ballot initiative to increase the vehicle registration fee. In 2010, San Francisco voters approved Prop AA, a local registration fee increase of $10 per vehicle, which now brings in $5 million per year. Half of that revenue is required to be used for street re-paving, the other half for pedestrian, transit, and bicycle improvements. As the revenue accumulates, the SF County Transportation Authority is compiling a list of projects to dole out the funds.

The Prop AA increase was permitted under a 2009 Senate bill on the condition that the funds be used specifically for transportation improvements to reduce car congestion, but those strings wouldn’t be attached to the VLF rate increase.

SB 1492 wasn’t the first bid to allow SF to increase the VLF: Since Schwarzenegger reduced the rate in 2004, Senator Leno has introduced six other similar bills, in addition to another one introduced by Senator Leland Yee in 2005. All proposals either died in the legislature or were vetoed by Governor Schwarzenegger or Governor Brown. However, the statewide VLF limit was temporarily raised to 1.15 percent from mid-2009 to July 2011 under a bill introduced by Senator Noreen Evans.

A local ballot measure to increase the VLF would require a two-thirds vote by the Board of Supervisors and a simple majority approval by voters.