San Mateo County paves way for sales tax increase: Board of Supervisors can place tax increase on ballots if desired, with split board approval

A sales tax increase could be seen as an “equivalent to earthquake and homeowners insurance,” Supervisor Jackie Speier said. 

The county is grappling with losing a previously guaranteed source of revenue from the state through the vehicle license fee shortfall refunds. With an estimated loss of more than $157 million in funding to the county, Speier said a new tax measure could help address that gap in funds.

Or, it could be proposed to voters to support programs through San Mateo County that could help with quality of life and affordability, Speier said. 

“This gives us the ability to go to the voters and ask them if they would support a quarter or a half cent sales tax … at some point in the future,” Speier said. 

Supervisor Lisa Gauthier cosponsored the resolution alongside Speier, and emphasized the vote Tuesday only made the option possible. 

“This does not create a tax, it simply gives our community the ability to decide whether to protect essential services in face of ongoing fiscal pressures,” Gauthier said. 

In California, sales taxes include a base state tax of 7.25% and an optional 2% cap for each county, meaning sales tax cannot exceed 9.25%. Anything above must be authorized by special legislation.

San Mateo County, and nearly every city within the county, are already at the allowable maximum tax rate. Any increase in sales tax in the county would build upon Measure K, the existing half-cent sales tax approved by voters until 2043. 

Currently, the total sales tax in the county is at 9.375%, and any increase could be a combined sales tax as high as 10%. 

“If we wanted to do anything in the future, we would have to have this authorization that would give us the opportunity to pass a resolution to go to the voters and see if they would be willing to increase the sales tax,” Speier said. 

The increase in maximum tax rate was opposed by Supervisor Ray Mueller and board President Noelia Corzo. 

“I have a long history of supporting measures in the county and in the school district, but I’m not comfortable supporting something without a specific plan, or details, or something concrete,” Corzo said. “I understand the intention … but for me, it’s too open ended and I don’t think it’s the right time to do that.” 

Mueller had previously said he would not support a tax increase.

Supervisors did not give any indication of when they may pursue a sales tax increase, but has the authority to do so for the next five years.