San Bruno eying property transfer tax ballot measure

“We are letting money go and we are also having to answer to residents asking why there is no money coming in from these sales,” Vice Mayor Linda Mason said. “We really have to get serious about what we want in our city and this is something that I think we definitely need to move forward with.”

Rates could vary and will be discussed by the council following the collection of polling data. San Mateo has a transfer tax rate of 0.5%, while other Bay Area cities have rates as high as 1.3%. Some also have progressive rates like Berkeley’s, which slides up to 2.5% for transactions over $2.5 million.

City staff estimated that, based on the city’s last five years of sales, a tax could net the city anywhere from $61,000 to $2.7 million annually.

Establishing the tax would require a charter — moving the city away from its general law classification. While other measures could be tacked onto a charter question on the ballot, councilmembers expressed concern that doing so could cause the initiative to fail to gain voter support.

The council last week indicated support for moving to ranked-choice or approval voting, systems that offer alternatives to the city’s current elections that allow voters to choose only their favorite candidate. The move would also require a charter, and the measure could be included with the tax question. The council also expressed a desire to establish term limits for councilmembers, and repeal the city’s at-large elected-mayor council arrangement, measures that don’t require a charter but could also be added to the question.

City staff estimated each separate ballot question would cost the city roughly $10,000.

“If I’m a voter and I really, really hate term limits, I’ll go no on the whole charter and then none of it goes through, so even though it’s more expensive I think they should be separate items,” Councilmember Tom Hamilton said.

Councilmember Marty Medina agreed, adding that while he would like the other changes, the most important need in the city was increased revenue.

Councilmember Michael Salazar, joined by Mayor Rico Medina, however, showed less enthusiasm for the tax. Salazar said while large companies like YouTube would likely “not even flinch,” it could impact smaller operators.

“If you’re an individual and you happen to have invested in some commercial properties, this would impact basically the value of your properties, and it’s not insignificant,” he said.

Rico Medina pointed to other fees the city has recently implemented or increased, like development impact fees and property taxes.

The city’s revenue estimate was based on including all properties except residential buildings with fewer than five units. It included retail space, office buildings, hotels, industrial property and vacant land. The tax, if implemented, could also be structured to include only properties over a certain price threshold.

City Manager Jovan Grogan said the city will hire a polling consultant to determine the likelihood of any combination of ballot initiatives succeeding. He said the council will meet again in April to further discuss the matter.

corey@smdailyjournal.com

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