Budget Shortfall Sparks New Tax Proposal

Residents may vote on a proposed utility tax this November that would fetch as much as $2.5 million in revenues for the city.

In the next few months the city will organize community workshops to welcome public input on a tax that would collect anywhere from one to 10 percent of residents' utility bills, such as electricity, gas, garbage and water.

“I have a very difficult time with this,” said Councilwoman Gina Papan. “I know we’re looking for new revenue, but I don’t think this is the way to go.”

Six cities in San Mateo County currently charge consumers a utility tax that averages about 5 percent of the bill, and this type of tax typically provides about 15 percent of a city’s revenue, according to Millbrae staff.

The potential tax, if placed on the November ballot, needs a simple majority to pass and would go into effect Jan 1, 2012. The city estimates a cost of $36,814, $3.30 per registered voter, for the ballot measure.

Seniors, disabled residents and low income families would be exempt from paying the tax.

“We are going to be and are in very rough waters,” said Councilwoman Marge Colapietro. “It has to get voter approval, and we can’t determine whether to proceed with this unless we hear from the public.”

Therefore, the city will continue to analyze possible scenarios for implementing the tax through community outreach.

The city will present a report to council members on May 24 and seek direction on whether to pursue or abandon the initiative.