On the ballot in November is a Transfer Tax (Measure A2) initiative and a Charter City initiative required to levy a transfer tax. It is up to the voters to decide whether to pass these measures. Here is some basic background information, as well as what I think are the most compelling arguments both FOR and AGAINST the measure. Please read all the way to the end of this statement for a complete perspective on the issue.
Background and Financial Outlook
These measures aim to generate additional revenue for city services and infrastructure as traditional funding sources have become strained.
The city is running an annual deficit of about $3 million/year. In the past two years, the city’s reserve has been reduced from $15.1 million to $11.2 million. At the current rate of spending, the reserve will be gone in three to four years.
Proposed Tax & Charter City Basics
This is not a graduated tax but a uniform rate tax. So, a $1.1 million home would be taxed $16,500, not $1,500.
Measure A1 proposes a “limited” charter city.” St. Helena will continue to be subject to the general laws of California. The charter would allow the city to impose a transfer tax, but it would not have any other practical effect.
Comparison Information
Lowest Tier Highest Tier
Average 0.7% 1.29%
Median 0.45% 0.45%
Range 0% to 1.5% 0.11% to 6%
Considerations (FOR)
Considerations (AGAINST)
Important Point
If passed, the city council can vote to reduce (or even eliminate) the transfer tax. Reducing the tax to be more in line with other cities in the state, along with cost-cutting and implementing some other viable revenue options (e.g., serious pursuit of grant funding, penalties on empty storefronts, some hotel development, a modest increase in short-term rental licenses, economic development beyond hotels and tourism, etc.), could offer a better solution to St. Helena’s fiscal predicament.
Where I stand
The Transfer Tax is definitely the easy solution to the budget problem. It gets at the unbalanced budget problem - and it does it right away (without having to wait a few years for a new development to be built). My concern about the transfer tax is that it seems to give the city a pass on looking at any kind of streamlining or cost-cutting. I am disappointed that, along with asking residents to approve a transfer tax, the city did not also commit to implementing cost-cutting measures. Successful businesses and governments are always looking to streamline their operations. Governments should aim to maximize taxpayer dollars by delivering services as efficiently as possible. Streamlining can help reduce bureaucracy, improve service delivery, and ensure that public funds are used responsibly. As a council member, I will advocate for responsible budgeting and cost-cutting measures to ensure that taxpayer dollars are spent wisely, prioritizing efficiency while maintaining essential services for our community.
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702 McCorkle Avenue, St. Helena, CA 94574
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