San Mateo County taking another turn at taxes

According to local news reports, San Mateo County’s mounting deficit has hit an estimated $150 million, and county administrators and elected officials are scrambling to come up with ways to bridge the gap. However, the wholesale closing of major facilities or major programs is still not necessarily on of the table.

This month, county department heads are expected to provide the San Mateo County Board of Supervisors with their proposals to reduce expenditures within their respective departments, although conflicts within the Deputy Sheriff’s Union and the District Attorney’s Office have already strained what will be a difficult budget process.

As part of the strategy to deal with the budget, the County Manager was to obtain the services of an outside consultant and create an advisory panel to work with such a consultant--implemented in a plan adopted by the board at a recent Feb. 9, 2010 meeting. They would then, if one assumes the electoral viability of, explore several tax generating options to place on the ballot, either in June or November 2010.

According to the plan, the consultant would review one or all of the following options, or perhaps others.

Countywide Sales Tax (1/4 cent) which could yield approximately $30,000,000 per year
• Utility Users Tax (Phone, Wireless, Electric, Gas, Water and Cable) which could yield approximately $2,000,000 per year
Commercial Parking Facility Operators (Measure Q) which could yield approximately $500,000 per year
Vehicle Rental Businesses (Measure R) which could yield approximately $3,000,000 per year
• Uniform Business License Tax, the yield for which is undetermined
Transient Occupancy Tax (hotel tax) which could yield approximately $100,000 per year

Unfortunately, many of the ideas the County Manager has proposed have already been attempted.

In fact, a countywide sales tax was attempted twice in the past few years, the most recent of which was Measure O, a 1/8-cent sales tax for city and county parks. That measure failed twice at the ballot and was half of the sales tax proposed by the county.

In addition, in November 2008, the board placed two measures on the local ballot designed to raise much needed revenue. The first, Measure Q, was an 8% business license tax on gross receipts of operators of commercial parking in the unincorporated County area, meaning San Francisco International Airport. This measure would have raised roughly $4 million annually without significantly impacting the pocketbooks of County residents.

The second tax effort, Measure R, would have levied a 2.5% business license tax on gross receipts of vehicle rental businesses in the unincorporated county area, meaning the airport as well. This measure would have raised roughly $7.5 million annually, as the tax itself would have generated tax revenue from car rental enterprises at the airport, which generate a great amount of tax for the City and County of San Francisco, but little for San Mateo County.

Both taxes would have generated money from visitors from out of town; so, theoretically, there should have been little in the way of opposition from county taxpayers and voters.

Both measures failed to garner even a simple majority on a ballot that included newly elected President Barack Obama. Measure Q garnered only 47.4% of the voter and Measure R garnered only 47.1% of the vote.

With a little support, both measures could have easily passed muster but both were simply abandoned. While San Mateo County's Supervisors placed them on the ballot, none took ownership of the measures nor helped to coordinate support.

Since then, according to the county elections web site, no less than 15 local jurisdictions have placed 20 tax measures on the local ballot in four separate local elections to raise new revenues in 2009 alone—with only some success as five of the measures failed even in such tough economic times.

In 2010, four local school districts have sought or are seeking new or renewals of local parcel taxes, and more districts are considering such an option including the Cabrillo Unified School District, the South San Francisco Unified School District, and the San Mateo County Community College District.

The county has been running in the red for several years and has been depleting its reserves to cover ongoing costs for several budget cycles. Last spring, the county announced that it had a $29 million structural budget deficit, prior to the Lehman Brothers collapse and before the full extent of the state economic meltdown was known. Now the deficit is $150 million and counting.

This month, county residents should know what the county’s consultant will propose and what the Board of Supervisors may elect to do. But the capacity for new taxes to support County services and the ability of the County’s elected leadership to see it through remain to be seen. Part of the package of taxes could have already been in place in 2008 and already generated a great deal of revenue had someone taken the reigns and mounted a campaign in support of the airport parking taxes. But obviously, no one did.

Nonetheless, voters in San Mateo County can expect a steady stream of local tax measures on the ballot in a series of elections to come.

Contact Bruce Balshone at bruce.examiner@gmail.com
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