San Bruno voters won’t have a chance to vote on a commercial property transfer tax in November, following Mayor Rico Medina and councilman Michael Salazar’s failure to put the issue on the ballot. vote.
Council deliberated for months on the measure, which would have asked residents to approve a 1% tax on sales of commercial properties and residential buildings of five or more units, estimated by the city to generate $1 million. dollars in annual revenue.
But support was needed from four of the five council members, and Salazar and Rico Medina indicated several concerns, mostly related to the strain the tax could put on the business community.
“It affects business, that means it affects people,” Rico Medina said.
However, the other three council members, who have been strong supporters of the tax, expressed frustration with the outcome.
“San Bruno is underfunded with huge needs,” said board member Marty Medina. “Not allowing our residents to vote on it is really disappointing, it’s almost unbelievable.”
The city faces significant infrastructure needs, at least $310 million, for which there are currently no plans to address them. In recent years, the city has also seen an increase in the number of high-priced real estate sales, such as the recent $328 million sale of The Shops at Tanforan or the $215 million sale of the Bayhill campus to YouTube.
Ahead of the council vote, City Manager Jovan Grogan pointed to problems with potholes, broken streetlights, a leaky fire station, collapsing storm drains and understaffing. The city’s budget was cut by $8.2 million amid the pandemic, he said, necessitating the elimination or elimination of many staff positions, some of which the city has not been able to bring back.
Still, Salazar pointed to the city of San Mateo, which has more than twice the population of San Bruno and is the only other city in the county with a property transfer tax, with a rate of 0.5%.
“Why would we want to have the most of any town in the county?” He asked.
There are 21 cities in the Bay Area with commercial transfer taxes, with rates as high as 1.3%. Some also have tiered rates like Berkeley’s, which slides up to 2.5% for transactions over $2.5 million, according to a city report.
Salazar also said that by endorsing the article for the ballot, he would effectively support the measure. He and Rico Medina said the council should instead focus on a larger initiative to increase the city’s revenue.
Refuting the idea, council member Tom Hamilton suggested that Salazar and Rico Medina could have written an argument against to appear on the ballot. He also said the concerns should have been raised earlier in the process.
“To wait until the last minute just before the vote to raise new concerns, when there is no possibility of resolving them, is extremely disappointing,” he said. Salazar replied that his concerns were not new.
A sticking point for Salazar in previous meetings, also raised by Rico Median as a concern, was that the tax would have forced the city away from its general law status – in which the city’s “municipal affairs” are governed by state law – to instead become a chartered city.
Charter cities can set their own rules (within the state constitution) regarding certain tax measures, certain land uses, certain aspects of local elections, and contracts—alls of which fall within the loosely defined framework of municipal affairs. . In addition to the tax measure, the proposed charter would have fully retained the “general laws” of the state that the city currently abides by.
For her part, Vice Mayor Linda Mason asked Rico Medina to expand on her call for a more holistic plan to increase revenue. “Your comment was that we need a plan and a process, and my question is what exactly are you talking about,” she said.
The city council launched a “fiscal sustainability project” in 2019, acknowledging that the city’s revenue was insufficient. Last year, the council identified a handful of possible actions, including a $124 million bond and a tax hike on Artichoke Joe’s, the city’s casino.
As a result, the city reached an agreement to collect an additional $900,000 a year from the casino, but following poor polling results, the council opted to drop the ballot deposit. The poll results revealed that the transfer tax would likely pass with a narrow margin.
“We created a process on how to prioritize this, we agreed to this process, we agreed this would be an initiative, we agreed the board would work together, we all asked staff to work on this,” Mason said.
Grogan said staff time spent on the measurement was “in the hundreds” of hours.
Nearly two dozen public speakers also weighed in at the council meeting, with comments split between those in favor and those opposed. Many in favor pointed to infrastructure problems or a lack of police.
Almost everyone who spoke in opposition described themselves as business owners or real estate agents. The San Mateo County Association of Realtors issued a “call to action” against the measure earlier this week, and several realtors who spoke out echoed similar talking points, including the fact that the tax would likely be extended to single-family homes or that the cost would be passed on to tenants.
Hamilton, Marty Medina and Mason have all made a point of saying that they did not receive money from the Realtor association during their campaigns.