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Mayor’s office and SFMTA lay out parcel‑tax options to close Muni’s budget gap
Summary
City staff presented two draft parcel tax structures intended to raise at least $150 million annually for Muni service, proposing progressive square‑footage tiers, exemptions and caps; transit coalitions urged a larger, more progressive, inflation‑indexed measure that prevents pass‑throughs to tenants.
SFMTA staff and the mayor’s infrastructure chief presented two draft parcel‑tax options Nov. 28 designed to raise local funding for Muni alongside the regional Connected Bay Area sales tax. The administration described a three‑leg strategy — agency efficiencies, the regional sales tax, and a local parcel tax — to address a multi‑year operating deficit.
Staff framed two related parcel‑tax options that split parcels into residential and nonresidential groups and combine a flat base charge with a square‑footage surcharge above a 3,000 sq. ft. threshold. In the first option, residential parcels under 3,000 sq. ft. would pay a flat $150 and $0.25 per additional square foot above that; nonresidential owners would face a higher flat rate (staff cited $600) and a higher per‑square‑foot charge, both capped (staff cited caps up to $250,000 residential/$400,000 nonresidential). The second option lowers the residential flat rate to $99 while slightly raising the per‑square‑foot rate to preserve revenue estimates. Staff said both options were designed to generate at least $150 million annually and could include CPI indexing and targeted exemptions (senior, nonprofit, institutional) and asked for board feedback on trade‑offs including caps and sunsets.
Public comment: transit and climate coalitions — including the Muni Now Muni Forever coalition, San Francisco Bicycle Coalition, Livable City and labor representatives — welcomed the progress but urged a larger, progressive measure that raises more than $150 million, explicitly avoids pass‑throughs to renters, and includes inflation indexing and steeper tiers on the city’s largest parcels. Coalition speakers said structural changes are needed so downtown office building owners pay a larger share; one advocate urged removing the proposed cap on large downtown properties.
Board Q&A: Directors asked staff about caps, sunsets, exemptions, and pass‑through mechanics. Staff explained most parcel‑tax exemptions reflect existing property‑tax exemptions (hospitals, universities, religious institutions), that a local senior exemption is possible, and that pass‑through rules can be written into a local measure for rent‑controlled units (past practice used 50% pass‑through provisions for some bonds). Staff estimated San Francisco has roughly 212,000 total parcels, about 206,000 taxable parcels, and noted that senior exemptions would cover roughly 27,000 parcels.
What’s next: staff will continue stakeholder outreach and refine technical choices; advocates said they will deliver an alternative proposal shortly that aims to be larger and more progressive.
