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San Carlos staff outline possible half‑cent sales tax to cover projected operating shortfalls
Summary
City staff presented a potential half‑cent general sales tax for the November 2026 ballot that is estimated to generate about $6 million annually for general city services; commissioners asked about shared services, small‑business effects and timing, and the council will consider whether to place the measure on the June 22 agenda.
San Carlos staff briefed the Planning and Transportation Commission on May 18 on a possible half‑cent general sales tax the City Council is considering for the November 2026 ballot. Rebecca Mendenhall, administrative services director, said the measure would be general‑purpose and is estimated to generate approximately $6,000,000 a year for the city to support services such as parks, road maintenance and public safety.
Mendenhall told commissioners that the city projects a structural operating deficit of roughly $500,000 to $1,000,000 annually over the next 10 years under current service levels, driven in part by declines in sales tax, transient occupancy tax and vehicle‑in‑lieu revenues. She said the city currently pays Redwood City for fire employees while owning and operating the two fire stations, and that any sales tax revenue would pay San Carlos’s portion of those agreements. "The money would be used just for the San Carlos portion of the agreement with Redwood City for fire," Mendenhall said.
Commissioners questioned the measure’s duration (staff said it would run for 14 years), its likely share of the city budget (staff said the $6 million would be roughly 10 percent of current revenues, a mid‑single‑digit to low‑double‑digit portion of the general fund), and whether development‑related community benefit funds would be combined with sales tax receipts. Mendenhall said community benefit funds set aside by development agreements are earmarked for large capital projects and that the sales tax would flow to the city’s general fund to address operating needs.
The presentation noted that San Mateo County has a countywide sales tax cap (9.875 percent) and that San Carlos currently has available capacity under that cap; staff cautioned that other agencies’ future ballot measures could consume that remaining capacity. The council is tentatively scheduled to consider whether to place the measure on the November ballot at its June 22 meeting.
No formal action was taken by the commission on the measure; staff said the presentation is part of public outreach and that more community meetings and materials will follow.
