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On the Nov. 3 ballot, Portola Valley voters will decide whether to make the town a charter town and authorize a real property transfer tax. If approved, Measure N would establish a tax of $10 per $1,000 of a property’s sale price. Placed on the ballot by the Town Council, it aims to provide Portola Valley with a reliable stream of revenue to address the town’s ongoing budget deficit. The Almanac invited representatives on both sides of Measure N to make their cases. This is the argument in favor; read the argument against N here.
By Jeff Aalfs and George Savage
Measure N creates a Home Rule Charter for Portola Valley and enacts a 1% tax ($10 per $1,000 of value) on all home sales. We are writing in support of Measure N.
As a long-time member of the Portola Valley Town Council and chair of the town’s Finance and Audit Committee, we are very familiar with the details of the town’s finances, and to be blunt, the town’s financial position has been deteriorating for years. While bookkeeping failures and audit delays have made the problem harder to address, the budget deficits confronting us are structural problems. Put simply, our expenses have grown much faster than our revenues.
The disproportionate growth in expenses is largely driven by increases in the cost of our contract with the San Mateo County Sheriff’s Office, which is our largest single budget line item. Town employee costs, both salaries and benefits like health care and retirement, have also grown. Recruiting employees has become more difficult as the local cost of living has escalated. In response, the town has been compelled to offer better salaries to recruit and retain staff. We have worked to improve the efficiency of both our law enforcement coverage and the work of our own employees, but we are already lean on staffing in both areas, particularly in the face of numerous unfunded state mandates — cutting back is simply not an option.
On the revenue side, our biggest source of funding is property tax receipts. Our property tax income grows as home prices increase and properties are reassessed after sale, but we receive only a small allocation of the total revenues (7 cents of every tax dollar) from San Mateo County. Importantly, one of the main reasons that our property tax revenues are limited is that, since its inception in 1964, Portola Valley has maintained a policy of limiting development to residential buildings, with minimal business and infrastructure: We don’t host hospitals, significant business areas or hotels. This has been a deliberate choice for generations, and it has resulted in the bucolic atmosphere we all enjoy, but it has come at a cost.
Perhaps more importantly, if Portola Valley were to dissolve, the decisions about future land use would revert to San Mateo County, which could ultimately decide to locate community infrastructure on land here in town. Passing Measure N is, in no small part, a tool for maintaining local control over our town.
By raising revenue from a real property transfer tax, Portola Valley can minimize the burden on current residents, particularly those living on fixed incomes, as opposed to a parcel tax which would fall on everyone, every year. We don’t like paying taxes any more than anyone else, but our homes have appreciated dramatically in value while we’ve lived here, in no small part because of the environment that the Town of Portola Valley has maintained through its policies; paying 1% of our eventual sales proceeds, if and when we choose to sell, is a small price to pay for the benefits, financial and personal, that we have received over the course of our home ownership. To enact this tax under law, we must convert Portola Valley to a charter town. The only practical implication of this change in status is that we can impose this tax; all other town operations will remain the same.
Like all of you, we love living in Portola Valley; Measure N is a key tool in maintaining the town we all call home, and we urge you to vote yes.
Jeff Aalfs served as a Portola Valley Council member from 2011 to 2024. George Savage chairs the Portola Valley Finance and Audit Committee.
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