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Cities seek taxes
November 02, 2009, 03:30 AM By Michelle Durand
The number of tax measures filling the ballot mean Election Day’s outcome will affect many Peninsula residents’ pocketbook even if they stay away from the polls as expected.

The lack of a presidential race or countywide issue to anchor the election will likely keep voter turnout low but residents of cities asking to fix their budgets through tax measures might think better of staying home.

Due to a mix of overall economic downturn, state takeaways and individualized hits from property tax drops, cities are telling voters to choose between greater taxes — one half-cent measure, in San Carlos, would push that city’s sales tax rate to the highest on the Peninsula — or seeing everything from public safety services to beloved programs on the chopping block.

In addition to city council races in nine cities, some are also asking voters to also decide if the city clerk should be an elected position or if councilmembers should change term limits, but come Wednesday, it is the financial decisions that will be most immediately felt. All need a majority approval to pass.

Six cities near the San Francisco International Airport — San Mateo, South San Francisco, Millbrae, Burlingame, Brisbane and San Bruno — are proposing hotel taxes. Such measures are often considered more palatable for residents because proponents say the cost is borne by tourists and other out-of-towners. The money is also protected from state takeaways, unlike property and sales taxes.

Others, like the aforementioned San Carlos measure and a similar proposal for an eight-year, quarter-cent sales tax in San Mateo, would put the onus on both residents and visitors — anyone making a purchase in the jurisdiction. And in Redwood City, business licenses would be hit with a 16.67 percent tax for the next three years if Measure Y passes.

Many of the hotel tax proposals are similar. Millbrae’s Measure J, San Mateo’s Measure M, Burlingame’s Measure H, Brisbane’s Measure G and San Bruno’s Measure F are each straightforward 2 percent increases, bringing the tax total to 12 percent. Belmont considered such an increase, but opted not to after meeting with hotel owners and managers who convinced the council the increase would be too burdensome due to declining occupancy rates.

Opponents of Brisbane’s Measure G argued gross tax receipts would likely decrease because “this tax will push demand outside the city of Brisbane, where it will support tax revenues and jobs elsewhere.”

Measure O in South San Francisco, which asks for a 1 percent increase to the hotel tax, is a bit different. Raising the hotel tax 1 percent could generate about $620,000 annually in a weak economy and upwards of $785,000 in a strong economy, Finance Director Jim Steele said previously. If approved by voters, the measure would go into effect mid-year, generating about $310,000 for the current fiscal year.

Voters boosted the hotel tax from 8 percent to 9 percent in November 2004. There is also a $2.50 per room, per night fee in South San Francisco benefiting the convention center. Taken together, the changes equate a 13.7 percent tax for the average budget room rate of $67.31. On an average business room rate of $131.55, the total equals an 11. 9 percent tax.

Although some question the need for more taxes in an already stretched economy, leaders in the affected cities say they have no choice if the community doesn’t want to see cuts in police, fire, library, parks and recreation and any number of other needs.

Money is also needed for infrastructure. Burlingame Mayor Ann Keighran has said her city must contribute $8 million to construct the Broadway interchange — a portion of which can come from an expected $2 million annual revenue generated by the hotel tax.

On top of the hotel tax, San Mateo is also asking voters to swallow a quarter-cent sales tax for the next eight years to fill a $4 million shortfall.

San Carlos is asking its residents to accept an even bigger hike of a half-cent for six years. Measure U is backed by the Chamber of Commerce and four of the five members of the City Council. Councilman Matt Grocott is the most vocal opponent, arguing the city needs to look at cuts rather than asking already stretched thin residents to cough up more money.

The new 9.75 percent sales tax would generate approximately $2.2 million annually for needs like police, maintenance, parks and recreation programs and capital improvements.

Redwood City’s measure Y would increase the business license tax gradually over three years by 50 percent, catching it up to where officials say it should be because of inflation since 1994. If successful at the polls, proponents estimated it can bring the city an extra $650,000 in revenue. There is no organized opposition to the measure.


Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.


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