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May 5, 2026
ITEM TITLE
State Legislation: Hear a Report on Assembly Bill 2484: San Diego Metropolitan Transit System: Transactions and Use Tax: Voter Initiatives (Alvarez) and Provide Direction to Staff on City Position Report Number: 26-0141
Location: No specific geographic location
Department: City Manager
G.C. § 84308 Regulations Apply: No
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Hear report and provide direction to staff on City position on Assembly Bill 2484: San Diego Metropolitan Transit System : transactions and use tax: voter initiatives. Possible positions include support, support if amended, oppose, oppose unless amended, or no position.
SUMMARY
The Mills -Deddeh Transit Developme nt Act establishes the San Diego Metropolitan Transit Development Board (also known as MTS), governed by a 15 -member board with specified powers and duties related to the operation of public transit services in the southern portion of the County of San Diego. The act authorizes MTS to impose a transactions and use tax of up to 0.5% for public transit purposes within its jurisdiction, or a portion of its jurisdiction, pursuant to the Transactions and Use Tax Law and subject to voter approval.
On March 24, 2026, Assemblymember David Alvarez introduced Assembly Bill (AB) 2484 titled “San Diego Metropolitan Transit System: transactions and use tax: voter initiatives ” which seeks to amend MTS’s enabling statutes to confirm a transactions and use tax may be imposed by a qualified voter initiative.
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ENVIRONMENTAL REVIEW
The proposed activity has been reviewed for compliance with the California Environmental Quality Act (“CEQA”), and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines, because it will not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the a ctivity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The San Diego Metropolitan Transit System ( MTS) is San Diego's regional public transportation provider serving approximately three million people across ten cities and portions of unincorporated San Diego County. MTS connects communities to employment, education, healthcare, housing, special events, and binational economic opportunities. Public transit in San Diego is not only a mobility service, it is an economic engine, a climate solution, and a lifeline for working families.
Since the COVID-19 pandemic, MTS has recovered more than 95 percent of its pre-COVID ridership and now ranks among the top transit systems nationwide for ridership recovery. Despite this progress, MTS is facing an impending fiscal cliff driven by pandemic -related revenue losses, rising workforce expenses, higher operating costs, flat sales tax revenues, and limited local funding. MTS has dev eloped a comprehensive financial sustainability strategy to delay its fiscal cliff and allow for more time to seek and pursue additional funding.
Assembly Bill 2484
Assembly Bill (AB) 2484 introduced by Assemblymember David Alvarez (co-authored by Assemblymember Chris Ward) seeks to amend MTS’s enabling statutes related to transactions and use tax authority to: 1) confirm the imposition of a voter -approved retail transactions and use tax of up to one -half of one percent dedicated exclusively to transportation and public transit purposes, as authorized by Section 120480 of the Public Utilities Code (Section 120480), may also be imposed by a qualified voter initiative ; and 2) e xclude the Section 120480 voter-approved tax rate from being considered for purposes of the combined rate limit under Section 7251.1 of the Revenue and Taxation Code. This legislation does not impose a tax.
According to MTS, AB 2484 would provide a critical tool to allow local voters the opportunity to determine whether to invest in transit in San Diego.
Chula Vista Legislative Platform
The City Council-approved Legislative Platform establishes the City’s support of efforts to protect dedicated transportation and public transit funds. This legislation seeks to provide the ability to create a new dedicated fund via voter initiative, therefore outside the scope of the Platform.
Staff seeks direction from City Council on the City’s position on AB 2484.
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DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current-year fiscal impact as a result of this item.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact as a result of this item.
ATTACHMENTS
1. AB 2484 (Alvarez)
Staff Contact: Tiffany Allen, City Manager
Adrianna Relph, Special Projects & Legislative Manager