RTC’s $4.3B passenger rail vision gets first public hearing; next hurdle comes in December

The next major vote for Santa Cruz County’s planned passenger rail project will come in December, when the Regional Transportation Commission could advance the project into the environmental review stage.

Thursday’s RTC meeting was the climax of a summer jam-packed with discussions and public engagement sessions on the ambitious passenger rail project, as the commission and staff held a public hearing on the project’s draft concept report published last week.

Although much of the information was included in an executive summary released in June, the report contains more details on some aspects of the project, including station locations, ridership and public utilities. The proposed 31-mile passenger rail project is estimated to cost about $4.3 billion to build.

Although the RTC hopes that state and federal dollars would cover a large portion of the cost, the high price tag still means county voters would likely see a new sales tax on the ballot in the coming years, but probably not until 2030. 

At a meeting in June, which saw a handful of commissioners express serious doubts and concerns about the cost and ridership estimates for the proposed train, the commission requested that staff develop a financial analysis of how much of the cost taxpayers would have to shoulder under different funding scenarios.

That analysis was published this week, and considered scenarios that range from grants covering half the construction costs to 80%, with local funds covering all of the operations and maintenance costs. According to the analysis, if local taxpayers pick up half the cost of the project, it would require a 2.25% countywide sales tax, generating about $126.5 million annually. If grants cover 80%, the tax would drop to 1.5%, generating about $84.4 million annually.

Commissioners have already bristled at the idea of another tax, saying it could push parts of the county to the highest sales tax rates in the state and that voters might not have the appetite to approve another tax hike. Santa Cruz, Watsonville and Scotts Valley all have 9.75% sales taxes, while Capitola has a 9.25% tax. Unincorporated parts of the county have a sales tax rate of 9.5%.

The analysis also mentions that the project would redirect about half of the region’s discretionary transportation funding away from road repairs and other transit projects to pay for pre-construction work for the train. Commissioner and Scotts Valley City Councilmember Steve Clark touched on this idea with concern: “How will that affect future projects that desperately need work?”

RTC executive director Sarah Christensen said a project of this magnitude starts with local investment.

“We really do need to have alignment locally if we expect the state or federal government to contribute funds to this project,” she said. “The way that we communicate that is to invest locally in this project.”

Other commissioners remain steadfast in their support for the project, including Watsonville City Councilmember Vanessa Quiroz-Carter.

“I sit in traffic for about an hour and a half each way, and it’s gotten worse with the Murray Street Bridge project,” she said. “I’m not going to change my mind on this, and a big reason is that it does really help people like me.”

District 4 County Supervisor Felipe Hernandez said Watsonville residents have the most to gain with a passenger rail project. “For far too long, South County has been left out of major infrastructure planning,” he said. “This project changes that narrative, placing Watsonville at the center of regional mobility.”

However, he added there should be a serious look at ways to save money, because the current vision for the rail project is “actually a Rolls-Royce when we’re looking for a reliable Toyota Camry.”

Residents chimed in at the meeting with familiar concerns and support, with opponents citing the high cost and modest projected ridership numbers as reasons to abandon the undertaking. Supporters point to long-term economic and environmental benefits, but some advocated for the RTC to conduct a value engineering analysis, or find ways to deliver the project at the lowest cost possible while maintaining a high level of service. 

The commission did not take a vote on the project on Thursday, but a finalized version of the report is expected to return to the commission toward year’s end, when it could vote to advance the project. The RTC still needs $14 to $16 million for the environmental analysis.

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