If there are opponents to Portola Valley’s Measure F, which would lower to 4.5 percent the 5.5 percent utility user tax, they have been keeping a low profile.
The measure has a ballot argument in its favor, but missing are an opposing argument and rebuttals. Town Administrator Angela Howard said an opposing ballot argument had not been submitted by the deadline.
The five-member Town Council unanimously agreed to ask voters if they want to lower the utility tax rate. The proposed cut, which needs a simple majority to pass, comes on the heels of a major boost to the town’s annual share of property tax revenues.
If enacted, the 4.5 percent tax rate would expire June 30, 2010. If voters renew the tax in November 2009, the rate would return to 5.5 percent the following July unless the council offered another rate.
The town’s 2 percent utility tax that sequesters funds for the purchase of open space is not affected by Measure F.
Two vocal utility tax opponents said they plan to vote for Measure F. Resident Bill Henderson, who helped organize a nearly successful effort to defeat the tax’s renewal a year ago, commented: “Well, it’s counterintuitive not to vote for a tax decrease.”
Ed Wells said that he, too, would vote for it despite strong preferences that the rate be cut by more than 1 percentage point and that the new rate be effective beyond 2010.
In what is perhaps a rare alignment of opinion, Mr. Wells and Mr. Henderson find themselves supporting a utility tax measure along with Mayor Steve Toben, Councilman Ted Driscoll, former mayor Gary Nielsen and Finance Committee Chair Michele Takei, all of whom signed the ballot argument for Measure F.
Why lower the tax?
The utility tax, renewed four times since its inception in 1985, taxes the water, gas, electricity and land-line telephone bills of residents and businesses. The money is used for expenses such as road maintenance and police services.Cell-phone calls had been taxed but the council recently eliminated it, citing in the ballot argument a “fluid regulatory and legal environment” that calls into question the tax’s applicability. Canceling it “resolve(s) this ambiguity in favor of (the town’s) residents.”
The tax had been the town’s way of making up for a quirk of Proposition 13 that kept property tax revenues unusually low for Portola Valley, Woodside and two other small towns in San Mateo County.
One pillar of the campaign against renewing the tax in 2005 was a complaint that its revenues, meant for operating expenses, helped build a $3 million reserve for a capital project — a new $20 million complex of buildings and playing fields at Town Center.
That complaint may have struck a nerve, because in mid-2005, the council pledged to use the funds exclusively for operating expenses.
The revenue picture changed after the 2005 election when the county Controller’s Office began observing a 17-year-old law it had previously ignored, and increased property tax revenues for the towns, including a possible $460,000 annually for Portola Valley. That raised a question as to whether a 5.5 percent utility tax was necessary.
The council can lower the tax by decree, but that action would trigger a penalty in property tax revenues, so the council used its option to put a tax cut on the ballot.
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