On Monday, the Oakland City Council will hold a special meeting to discuss a number of proposals to add new taxes (PDF) for the June ballot.
Let’s take a look at what’s on the agenda.
Temporary Parcel Tax
First off, we’ve got a “temporary” (five years) parcel tax. I put quotes around temporary because if you think they’re not going to be back at the ballot in five years asking for it again, you are delusional. Here’s the language (PDF):
Shall the City of Oakland establish a five-year temporary fiscal emergency parcel tax to preserve essential city services, including police services and technology, youth violence prevention, library services and parks and recreation services and other General Purpose Fund purposes?
This one is a general tax that we get to pay “for the privilege of using municipal services.” It’s $80 per parcel for single family homes, and $54.66 per unit on multi-unit properties. Owners of vacant units can get half off. There’s a formula for determining the cost on non-residential parcels, and owners of undeveloped land don’t pay. There’s an exemption for very low income homeowners, and a 50% pass-through to renters on rent controlled properties. Non-profits that own for-rent affordable housing would pay only half the tax per unit.
The money has no specific service it would be spent on — it’s just money to go to the General Fund for the City to spend on whatever. It is estimated to generated roughly $11 million per year
Councilmembers Ignacio De La Fuente and Libby Schaaf both noted at Rules Committee yesterday that while they were willing to proceed with scheduling the items for Monday’s Special Meeting, they were not willing to support the tax.
Transfer Tax Increase
Right now, the City of Oakland imposes a 1.5% transfer tax on sales of property. If this tax were to pass, the transfer tax would remain at 1.5% for the majority of properties. But for properties with a value of more than $5 million, it would be 2%.
The language (PDF):
Shall the City increase its real property transfer tax rate from 1.5% to 2% for transfers of real-property valued more than $5 million?
Again, this is just money that goes into the General Fund. This one needs only a 50% vote to pass.
I was actually talking to a friend about the transfer tax just the other day. He was suggesting the City come up with some kind of mechanism by which home buyers could pay their transfer tax over a period of three or four years, in order to ease the costs of buying a home.
I asked what the point of that would be, and as an example, he’s like “Well think about if you’re buying a million dollar home. You have pay $15,000 in transfer tax!”
Naturally, I was like “If someone can afford a million dollar home, then one assumes $15,000 is not going to be enough of a burden that they can’t do it. If it is, they should probably reconsider their decision.”
So. I don’t really care one way or another about having a higher tax on really expensive properties. Apparently, they did this recently in San Francisco? I don’t know, but that’s what someone told me today when I mentioned this proposal. Nevertheless, whether or not it makes sense to have a higher transfer tax on higher value properties in theory, I don’t see how this particular proposal makes any sense whatsoever. There’s no rational reason provided for doing this, only that it would bring in some money $1.6 million per year).
This is basically the same thing we had on the ballot in November. It failed. Will it pass the second time around? Who knows. Here’s the text (PDF):
Shall the City of Oakland establish a five-year temporary, fiscal emergency telephone “access line” tax at a rate of $1.99 per month per access line and $13.00 per month per “trunk line” to preserve essential city services, including police services and technology, youth violence prevention, library services and parks and recreation services and other General Purpose Fund purposes?
This one would be expected to generate $8.2 million per year for the City, except in the first year, when it would be more like $5 million.
Special meeting on Monday
Some people are against all new taxes on principle. They feel like the City already taxes them too much, or that tax money is never spent as promised, or the City is wasteful, or what have you. I am not one of those people. I am open to supporting new taxes for the City under appropriate circumstances.
However. Saying that we need money and throwing new taxes on the ballot at the last minute without talking to anyone about anything is not an appropriate circumstance. This is just totally random, and I struggle to see how anyone could reasonably expect such measures to pass.
So like I said above, the Council will be holding a special meeting on Monday to discuss the proposed taxes. The meeting starts at 5:00 pm.
In addition to the new taxes, the Council will also consider a proposal for a Charter Amendment that would make some adjustments to the way the pensions from the old Police and Fire Retirement System (PFRS) are handled. I don’t have time to get into it now, but I do hope to write a longer post about PFRS soon. For now, this memo (PDF) from Councilmember Ignacio De La Fuente explains the rationale behind the proposed Charter Amendment.