Committee Advocates Increasing Piedmont Debt and Real Property Transfer Tax
The Piedmont Budget Advisory and Financial Planning Committee’s recommendations are as follows:
Facilities Maintenance and Other Infrastructure Needs
The Committee recommends an increase in the Real Property Transfer Tax (RPTT) in order to meet the needs of the facilities replacement fund and other infrastructure needs on an average annual basis of at least $700,000 – $900,000. The Committee believes this increase should run in perpetuity until otherwise determined by the citizens that it is no longer necessary.
Capital Projects
The Committee believes that it is necessary and appropriate for the City to pursue debt financing for the City’s public building needs. Determining the amount of debt financing, and the scope of facility projects, will require public input and careful consideration by the Council.
The Committee recommends pursuing a parcel-based tax assessment. This is preferable to an ad valorem tax given that the facilities to be funded include primarily (or potentially exclusively) essential public services buildings benefiting all Piedmont residents.
Despite current economic uncertainty, the Council should move swiftly in planning for the City’s most urgent facility needs, specifically the City’s police and fire stations, to take advantage of current low long-term interest rates, and the decline in local debt service burden occurring in 2021 and 2022.
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Whoopee! More parcel taxes.
Taxes, glorious taxes!
What wouldn’t we give for
That extra bit more —
That’s all that we live for
Why should we be fated to
Do nothing but brood
On taxes,
Magical taxes,
Wonderful taxes,
Marvelous taxes,
Fabulous taxes.
For a body that is driven by forecasts, the BAFPC just can’t seem to bring itself to do a proper forecast of transfer tax revenue. By assuming flat transfer tax revenue of $2.8M for the next 10 years, the committee fabricates a deficit that justifies their proposal for a tax increase. Over the past 10 years, annual transfer tax revenue has averaged over $3.5M and for the past two years has come In over $3.8M, more than enough to to provide the $850,000 the committee claims is needed for facility maintenance. It’s as if the left hand does not know what the right hand is doing. Perhaps Council will put 2 and 2 together and see that the tax increase BAFPC proposes is not needed.
The other remarkable reason BAFPC offers for raising the transfer tax is so Piedmont can be more like its neighbors, namely Oakland and Berkeley (see table 2). These two cities were never on the “comparable cities” list yet their transfer tax rates are deemed appropriate for Piedmont. Why not Albany or San Leandro, cities with lesser commercial tax bases and certainly more comparable to Piedmont that the other two cities. It’s kind of laughable that a city that prides itself on “not being Oakland” now wants to be like their “neighbor”.