To help increase revenue for city infrastructure projects and reduce budget deficits, San Mateo officials will ask the public in November to vote on a ballot measure to increase transfer tax rates on property sales over $10 million.
Councilmember Eric Rodriguez said while the timing and measure weren’t perfect, he viewed it as important to raise funding for key service needs.
“Here is a situation where we can raise funds for our recreation centers, parks and streets where we are not inflicting these costs on everyday San Mateo residents,” Rodriguez said.
The measure would allow the city to change its flat real property transfer tax rate for properties sold or transferred for $10 million or more. No rate changes would occur for properties sold under $10 million. An RPTT is a tax paid upon transfer or sale of a property and is split between a buyer and seller during residential sales. San Mateo currently has an RPTT rate of 0.5% for residential and commercial buildings. The proposed rate increase would go from 0.5% to 1.5%, generating an additional $4.8 million. The current revenue for sale prices over $10 million is $2.4 million, with the revised rate expected to bring in $7.2 million. The tax increase would only affect a small number of properties. The current San Mateo median sale price for a single-family home is $1.84 million and $880,000 for a condo.
The city has been examining bringing in more revenue to address long-term budget deficits and lost revenue from the pandemic. According to the city, the upcoming budget will see a $4.7 million deficit, with the city likely to draw nearly $30 million from reserves over the next five years. The city expects to restore reserves to pre-pandemic levels by 2032. The city also has $300 million in infrastructure projects officials want to fund but with no identified revenue source. Projects include Marina Library improvements, implementing a green fleet by 2030, infrastructure funding, recreation facilities, and bicycle and pedestrian projects.
“These things dramatically improve the quality of life for the people who live here. We are talking about parks, streets, safety and improvements that people care about and rely on,” Councilmember Joe Goethals said, who was fine with letting the voters decide.
Councilmember Amourence Lee noted the tax had not increased in more than 40 years and was less than comparable rates in other cities, with less than 1% affected.
“I think this is incredibly urgent and well justified,” Lee said.
A city survey of 678 registered voters found support for an RPTT increase was 61% if the lowest tier was $3 million. At a May 16 council meeting, the numbers spurred the council to explore an RPTT increase tier beginning at $10 million. The city also explored a quarter-cent sales tax increase in its survey. General tax measures require a simple majority to pass.
Deputy Mayor Diane Papan voted against adding it to the ballot over concerns about the knockoff effect on big sales to smaller folks at a bad time. In previous council meetings, she said she had been open a simplified RPTT at a threshold of $10 million.
“If it adds on to the cost of the sale, it has to trickle down to somebody, and I think it can trickle down to small users,” Papan said.
Following the June 20 ordinance introduction, the council plans to put the item on the agenda at its July 18 meeting. The deadline to submit a measure to the County Elections Office is Aug. 12 for the November elections. The council voted 4-1 to approve it.
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LittleFoot said:
LittleFoot said:
I challenge you to challenge me, Terence.
LittleFoot said:
Voting is for children. Politics is WWE - Hollywood for ugly people.
LittleFoot said:
Time only exists to the living - Eternity is real. Once the physical body passes away - the soul is transferred and you no longer have control.
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(4) comments
Hard to take Papan’s reasoning at face value when it’s vague and unsubstantiated.
Folks, remember the $10 million worth of PPE left out in the rain? Here’s another tax increase to make up for that loss. A loss from which, I believe, there have been no consequences to those wasting the $10 million. Perhaps $10 million will the new “standard” for waste without consequences in San Mateo?
Terrence, it’s interesting that you don’t seem to know the difference between the City Of San Mateo and the County at San Mateo.
Mr. Bonilla, thanks for your response. I’ve never heard of the County at San Mateo; I think you meant the County of San Mateo. Since you sound like an expert, perhaps you can educate me on whether proceeds from this RPTT are solely for the City of SM, or whether a portion is passed onto the County of SM. On how much City revenue is passed on to the County, and vice-versa. On whether revenue to the City is fungible. If you don’t have time, I can always fall back on this transfer tax funding ongoing, and ever increasing, pensions and benefits. BTW, a quick look at the City budget shows there are $millions budgeted for unnecessary infrastructure projects. We can easily cancel those wish list items and leave the RPTT alone. Or, heaven forbid, reduce the RPTT (in addition to any other proposed tax measures) by being responsible stewards of other people’s money.
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