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In November, 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.
In July, the Town Council unanimously placed the local funding measure on the November ballot in hopes that the tax will provide Portola Valley with a reliable stream of revenue that will help address an ongoing budget deficit.
As a charter town, revenue from the tax would directly go into the town’s general fund. With a bigger budget, Portola Valley could address townwide maintenance needs on storm drains, vegetation management, wildfire prevention and maintain its level of police services from the San Mateo County Sheriff’s Office. Tax revenue will also be used for general municipal services.
Becoming a charter town will allow Portola Valley to maintain its local autonomy and establish a locally controlled funding source, the town says, while preventing San Mateo County from taking over the town’s zoning and planning services.
“If Portola Valley were to lose our town status, we would lose local control over important decisions that affect our community, including zoning and land use,” wrote proponents for Measure N. “Instead of decisions being made in our town, these decisions could be made by (the) county.”
Primary signers in support of the measure include town historian Nancy Lund, Brenda Lane Munks, Rita Comes, former mayor Gary Neilsen and Trails and Path Committee member Fred Leach.
Arguments in favor of the ballot measure cite the impact the town charter would have on establishing funds to reduce wildfire risk through vegetation and brush management and preventing flooding and water pollution by repairing deteriorating storm drains.
The argument against Measure N is led by William Urban, a member of the town’s Finance Committee. He argues that the tax is “unfair and inequitable.” Urban claims that the town did not ask the Finance Committee for an endorsement before moving forward with the measure.
“Only 2-3% of residents selling properties each year would pay a tax of $45,000 and up on an average-priced sale, while the 97-98% of non-selling residents and renters get a free pass,” the opponents wrote.
Opponents say the initiative goes against the town’s community values. Urban added that the Town Council failed to include exemptions for those moving within the town or for reasons due to fire or natural disasters.
He also argues that the transfer tax will either reduce the seller’s net proceeds or increase prices for buyers, creating a limitation on the number of potential buyers and the realized price. He said “there are better, fairer alternatives for additional revenue, expense management and an imperative to explore them.”
Proponents of Measure N state that the town may create additional exemptions and may consider other measures to enhance accountability for how the revenue will be used, supporters said.
If Measure N does not pass, the town will be at risk of cutting service levels and becoming unable to fund community needs for emergency preparedness and wildfire prevention, said those in favor.
Supporters also contend that the decision to pursue the real property transfer tax was made after extensive analysis and input from the Finance Committee.
In a rebuttal argument, also signed by town resident Danna Breen, Urban writes that the town is not at risk of a “financial collapse” or disincorporation. He called the proponents’ messaging “fear mongering” and “exaggerated.”
He proposed that the council could have offered an alternative tax measure for voters to choose — an annual parcel or user utility tax of $800 or less per residence that would “spread the tax burden equitably,” across town. He also suggested a transfer tax that could be applied on the difference between sale price and tax-assessed value.
Proponents argue that a parcel tax is harder to enact and would be regressive for the town, “forcing homeowners to suffer an increased annual tax burden no matter what their circumstances.”
“We should strive to share taxes fairly for the kind of town we all want — not to saddle a huge exit toll on our departing neighbors,” Urban wrote.
The ballot measure needs a simple majority to pass.
For more information on Measure N, visit portolavalley.net/town-government/election-information.
