EDITORIAL: Give Atherton parcel tax another try EDITORIAL: Give Atherton parcel tax another try (December 29, 2004)

Atherton City Council members learned a lesson on tax policy the night of December 15 that they won't soon forget.

It is not clear now if the council saw trouble coming, but when the meeting convened, more than 40 real estate agents crowded into Town Hall, every one hopping mad about the council's plan to tax real estate commissions if voters authorized such a tax in March. The council desperately needed to replace revenue from a parcel tax voters turned down November 2, and was ready to give its final approval to a title insurance tax on real estate, as well as add a new business license tax on contractors.

But sometime before the meeting, city officials learned that previous legal approval of the title insurance tax was withdrawn, and their only choice was to approve what was going to be an extremely unpopular tax on real estate commissions. After several hours of agonizing, including two trips to executive session, the council did the right thing and pulled the entire tax package off the March ballot, but vowed to come back soon with another plan.

That plan should clearly be a parcel tax, despite the renewal measure's failure to pass November 2. But we say that with a caveat: If the council expects a new parcel tax to pass, all five members must look to previous successful campaign strategies and thoroughly explain the city's dilemma if the tax is not approved.

Two former City Council members, Dianne "Didi" Fisher and Bob Huber, have already said they would support the parcel tax, and we are sure there are many others willing to get on the bandwagon. There are plenty of reasons why a parcel tax is the best, including:

** Every property owner pays a relatively similar share, once a year. To close its budget gap, the council might increase the tax above the current $750 assessment.

** The tax must be renewed on whatever timeline the council places in the ballot language. Previous taxes have lasted four years.

** The tax is deductible on federal income taxes -- a huge plus in Atherton, where many homeowners are in high tax brackets.

As council member Alan Carlson noted at the December 15 meeting, the town has been managed frugally during the last year, cutting its budget by $1.2 million and reducing the number of police officers and other employees. Without sales tax revenue, Atherton depends on a parcel or other taxes to meet its obligations.

It has been said that the parcel tax failed in November because some residents believe the town pays too much for police services. That may be true, but withholding approval of the parcel tax is not the way to remedy the problem. By doing so, residents simply put the town in an even greater bind and could end up seeing services other than police cut.

Atherton needs a parcel tax just to keep the doors of local government open. The council should try again to pass a parcel tax, and even give some consideration to Councilman Charles Marsala's idea of a 20-year tax. That would ease the pressure on council members, who should be spending their time making policy for an efficiently run government, not begging residents to approve a parcel tax.

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