San Mateo council studies sales tax, parcel tax and bond options to close budget gap

San Mateo City Council members on Monday studied a slate of revenue enhancement options intended to reduce a multi‑million-dollar general fund shortfall and to help fund long‑deferred capital projects. Deputy Finance Director Abby Vesser led the study session and presented estimates for a quarter‑cent transactions‑and‑use tax, parcel taxes, a utility users tax, benefit assessments and general obligation bonds.

Vesser said the city adopted a FY 2025–26 budget in June that included an $11.9 million deficit, and that the shortfall has since widened to about $13.9 million after the state’s vehicle license fee (VLF) backfill came in at roughly 68–70 percent of expectations. “So when we really look at what our historic budget deficits have been and where we think it’s going, it’s usually going to be between $5 million and $7 million,” Vesser said, and staff is “looking for $7 million to help with our operating deficit.”

The city’s consultants and staff outlined tradeoffs for each option and recommended next steps. The ad hoc committee that met August 6 recommended that the council study a quarter‑cent sales (transactions and use) tax for 2026 and explore a general obligation bond for capital needs.

Key proposals and estimates

- Transactions-…