Measure K

Measure K (MK) is San Joaquin County’s half-cent sales tax for transportation projects. It significantly improves the lives of residents by funding enhancements to freeways, streets, roads, and the transit system.

Voters approved Measure K in 1990 for a 20-year period, which generated more than $735 million in transportation improvements throughout San Joaquin County. In November 2006, after observing the success of the program, nearly 78% of voters renewed the sales tax for an additional 30 years. This renewal is known as the Measure K Renewal (MKR). This communication uses MK and MKR interchangeably.

By 2041, Measure K is expected to deliver an estimated $2.64 billion in transportation improvements across the region. These improvements will target San Joaquin County’s freeways, streets, roads, public transit networks, and programs that promote pedestrian and bicycle-friendly environments. The program protects and enhances the transportation system both now and in the future.

Each year, the SJCOG, as the Local Transportation Authority for San Joaquin County, collects the half-cent sales tax and allocates the funds to transportation projects and programs. These allocations follow the 2025 Measure K Renewal Strategic Plan and the 2024 MK Ordinance and Expenditure Plan (amended in June 2024).

The MK Ordinance and Expenditure Plan includes the following categorical allocations for funding:

• 35% or $883 million to Local Street Repairs and Roadway Safety
  • 86% or $759 million for local street repairs
  • 14% or $124 million for roadway safety
• 32.5% or $820 million to Congestion Relief Projects
• 2.5% or $63 million for Railroad Crossing Safety projects
• 30% or $756 million to Passenger Rail, Bus, and Bicycles:
  • 39% or $295 million to passenger rail transit
  • 49% or $370 million for bus transit (RTD is to receive a minimum allocation of 50% for programs in this category. Source: 2024 MK Ordinance and Expenditure Plan, Bus Transit, page 3)
  • 5% or $38 million for bus rapid transit capital
  • 7% or $53 million for bicycles, pedestrians, and safe routes to school

The MKR Ordinance authorizes SJCOG to allocate funds to projects in the 2024 MK Ordinance and Expenditure Plan to meet contractual and program obligations. SJCOG may withhold disbursement only until funds are required for those obligations. If MKR generates excess revenues, SJCOG must allocate the excess consistent with the voter-approved plan or with formal amendments to the plan.

• January 23, 2025:  At the SJCOG Board meeting, staff presented information about the Draft MK Strategic Plan.  The following two important items regarding additional MK funding were included in the staff report (January 23, 2025):

1. 1. The draft MK Strategic Plan reflects updated revenues from SJCOG’s financial consultant, which show higher growth in Measure K than previously forecasted. Specifically, the revenue estimate for Measure K increased by 2% as compared to the prior estimate. With this new forecast, the 40-year Measure K projection changed from $2.636 billion to $2.691 billion, representing a $55 million increase.
   2. Regarding all categories, Measure K policy held “reserves” each year in the event of a recession and/or reduction in revenue collection. With higher-than-anticipated revenue collection since the pandemic, as well as a higher overall funding forecast, staff see this as an opportunity to consider the assignment of Measure K funds held in reserve.  SJCOG staff is identifying the amounts that have been held in reserve, to date, for discussion among the SJCOG committees.  Measure K revenues in reserve include:

• • • Approximately $62.0 million in the Regional Arterials subcategory
    • Approximately $37.8 million in the Passenger Rail subcategory
    • Approximately $18.8 million in the Bus Transit subcategory
    • Approximately $9.7 million in the Bus Rapid Transit subcategory
    • Approximately $0.4 million in the Bicycle & Pedestrian subcategory

• • The staff report then asked the questions, “Should these funds be made available for Measure K programming?  If so, what process and policy implications should be considered?
  • RTD shared with the SJCOG Board that the funds should be distributed back into the respective project funding categories based on the percentages in the MK Ordinance and Expenditure Plan. This MK information item was only for discussion, and no formal decision was made regarding the MK funding reserve, which totals $128.7 million.

• March 27, 2025:  The SJCOG Board agenda included an MK action item to approve the Draft MK Strategic Plan and to direct staff to proceed with the SJCOG Executive Committee’s proposed process to assess MK eligible project needs for SJCOG Board informational purposes.

The staff report included information that the Executive Committee provided SJCOG staff direction (1) to finalize the draft Measure K Strategic Plan, a routine update with no policy changes, and (2) to further develop a process that assesses urgent project needs (again, with no discussion of funding allocations) to present to the SJCOG Board for informational purposes.  The proposed project needs assessment will focus on the following:

• • Projects must be Measure K eligible
  • Project urgency within 2 years
  • Explain the need for a one-time infusion of funding
  • Projects do not incur ongoing costs
  • Projects do not supplant existing funds
  • Projects demonstrate that there is little or no other funding available
  • Verification that the project needs are shown in the agency planning documentation

Nothing in MKR authorizes SJCOG to set aside excess funds for discretionary purposes or to condition distribution on an “urgency” application process.

Despite these limitations, SJCOG has conditioned the release of excess MKR funds on extra-statutory criteria, such as project urgency, the absence of ongoing costs, and a demonstration that no other funding is available.

This process is not found in MKR or described in the MKR Ordinance and Expenditure Plan. Rather, the process for distributing excess funds was developed internally through meeting minutes and staff direction, rather than through formal amendment of the MKR Ordinance and Expenditure Plan.

• March 28, 2025:  SJCOG sent a letter to its partners asking the respective agencies, including RTD, to identify urgent MK needs.  The letter included the confirmation of items previously listed from the Board’s direction on March 27, 2025.

• April 11, 2025:  RTD submitted five projects to SJCOG for MK urgent funding. Four projects were in the Bus Transit category, with a total funding request of $25,120,000, and one project was in the BRT category, with a funding request of $10,000,000.

• April 24, 2025:  At the SJCOG Board meeting, staff shared information regarding “MK Urgent Needs Assessment.”  The staff report included RTD’s five projects, with projects from other agencies, and noted that the projects have not been reviewed by SJCOG staff as complying with the established criteria and previously mentioned.

• June 26, 2025:  The SJCOG Board agenda included an MK Urgent Needs Assessment item to approve recommendations and provide direction on next steps. The report included two tables with the MK projects from partner agencies.  Table 1 lists projects with staff-proposed recommended actions, and Table 2 indicates that project reviews are still underway.

RTD’s CEO and Government Affairs Director provided information and shared that RTD’s five projects should be moved to Table 1 for approval. They also shared that RTD is the only agency with a project in the BRT MK funding category, and it should be funded.

• July 3, 2025:  SJCOG responded with a letter to RTD stating that SJCOG staff will recommend to the SJCOG Executive Committee the denial of RTD’s MK funding request. All five of RTD’s projects were in Table 2. Staff were directed to continue coordinating with partner agencies in Table 2.

• July 30, 2025:  RTD received a letter from the SJCOG Executive Director notifying RTD that the SJCOG Executive Committee had approved the action to recommend to the SJCOG Board that there are no further eligible projects that qualify for MK urgent needs funding and to close out the 2025 urgent needs process. The letter also stated that the Executive Committee affirmed the ineligibility of RTD’s request for MK funding.

• August 28, 2025:  The SJCOG Board approved the Executive Committee’s recommendation to close the 2025 MK urgent needs process with the finding that there are no eligible projects remaining, including the five projects the RTD requested MK urgent funding for. The SJCOG Board staff report stated: “Staff finds that all the projects from the San Joaquin Regional Transit District do not meet all the criteria in the Measure K urgent needs process and have transmitted the attached correspondence to RTD.  And, SJCOG has provided a May 2025 RTD staff report indicating cash reserves of $61 million, which is referenced in the correspondence.”

• August 28, 2025:  RTD sent a dispute letter to SJCOG regarding the distribution of MK “urgent’ funds.  RTD’s letter concluded that SJCOG’s process for the distribution of excess MK funds and subsequent denial of RTD’s application to access these funds contravened the plain text of MK and established legal standards. The letter further stated that the denial is unsupported by the record, contradicted by SJCOG’s own audits, and inconsistent with both industry and federal financial guidance.  RTD urged SJCOG to promptly reverse its decision and administer MK in accordance with the law.

• September 5, 2025:  SJCOG sent a letter to RTD in response to RTD’s August 28, 2025, letter regarding MK.  The SJCOG letter disagreed with RTD’s appeal and explained that the SJCOG Board approved a one-time administrative programming approach earlier in the year for the unprogrammed MK cash balance (i.e., $128.7 million in reserve).

RTD did not receive any of the $128.7 MK “Urgent” reserve funding.

If MKR generates excess revenues, SJCOG is instructed by the Ordinance to allocate those excess funds in a manner consistent with the MK Ordinance and Expenditure Plan adopted by the voters, as modified through formal amendment.  Nowhere does Measure K authorize SJCOG to:

• Reserve funds for discretionary purposes;
• Withhold allocations consistent with the MKR Expenditure Plan based on internally created urgency criteria; or
• Require a new application process wholly untethered to the Ordinance.

Despite the lack of authorization, SJCOG subjects excess funds generated by MKR to an “urgency” review process, requiring applicants to demonstrate project need within two years, the absence of ongoing costs, and the lack of alternative funds, among other criteria not contemplated by the Ordinance.  This process of distributing excess funds was never formally enacted by an amendment to the MKR Expenditure Plan, nor was it approved by voters.

As specified in the MK Ordinance and Expenditure Plan, RTD is entitled to 50% of the MKR revenues from the Bus Transit subcategory.  SJCOG has estimated approximately $18.8 million in excess funds from this category.  Accordingly, RTD is entitled to $9.4 million of these excess funds.  The fact that SJCOG has previously approved funding for projects above the 50% minimum is inapposite.  Withholding these funds and reallocating them for distribution through an “urgency” review process is contrary to the Ordinance and the MKR Expenditure Plan.  In addition, SJCOG has estimated approximately $9.7 million in excess funds in the BRT category.  RTD is the only qualified recipient in San Joaquin County for BRT funding.  RTD has submitted a Bus Fleet Replacement request for these funds, and they should be provided to RTD.  Withholding these funds and reallocating them for distribution through an “urgency” review process is contrary to the Ordinance and the MKR Expenditure Plan.

It is RTD’s understanding that California law does not permit an agency to impose additional hurdles absent statutory authority.  Because MKR requires the prioritization of allocating excess funds to MKR Expenditure Plan-identified projects and does not authorize SJCOG to impose additional conditions, the adoption of an urgent process to distribute excess funds is arbitrary, capricious, and unreasonable.

MK partially funds RTD’s BRT services and capital projects, Commuter services, County Hopper services, passenger amenities projects, fleet/engine replacements, bus purchases and replacements, and funds Park-and-Ride lot leases. The fiscal year (FY) 2025 budget is based on MK agreements from FY 2024 through FY 2027, flat funding, which provides for RTD funding at the same level it has been at since FY 2018.

Importantly, RTD transports approximately 2.5 million riders annually and carries 86% of all bus transit ridership in San Joaquin County, underscoring the agency’s critical role in connecting communities across the region.

As of this posting, RTD has not received any of the $128.7 MK reserve funding.

Check back for more updates in the future.