Rent control has been the hot-button issue in Richmond this election season: Earlier this month, a city council meeting devolved into a shouting match after the council failed to pass a highly anticipated ban on certain evictions and high rent increases.
But the rent control ordinance—Measure L—isn’t the only measure on the ballot this year. In November, Richmond residents will also vote on Measure M, an ordinance to raise the “documentary transfer tax” that property owners are required to pay on real estate sales.
Under the current law, the city collects $7 for every $1,000 of a property’s sale price. If passed, Measure M would raise this tax rate to $10 dollars for properties sold for less than $400,000 and to $15 for properties priced at $400,000 or more.
Yet Measure M has been largely overlooked this election season.
“I think it’s sort of off the radar,” said Mayor Tom Butt, who originally brought the ballot measure to the city council in June. Butt added that he thinks many residents are likely to vote against the measure by default when they hear the phrase “tax increase.”
If it passes, Measure M could generate between $3 and $5 million in additional tax revenue for Richmond, depending on the real estate market, said Richmond Finance Director Belinda Warner, who conducted the city’s official financial analysis of the measure.
However, opponents of the tax increase have expressed concern that the council may not be capable of managing a potential surplus.
“Frankly, our opinion of the Richmond City Council government is that they do a very poor job,” said Contra Costa Taxpayers Association president Jack Weir, who submitted the official argument against Measure M. “We think they really don’t have a revenue problem; what they really have is a spending problem.”
Councilmember Vinay Pimple is also concerned that the measure will aggravate the council’s reputation for mismanaging the city budget.
A similar measure is on the ballot in San Francisco, where the Board of Supervisors is planning to use the additional revenue to fund the City College of San Francisco and street-tree maintenance, should the measure pass.
But in Richmond, it remains unclear where the revenue from Measure M would be directed.
Councilmember Pimple said he originally suggested using the transfer tax to offset the cost of the Richmond Kids First Initiative, which is slated to be on the ballot in 2018, but his colleagues on the council dismissed the idea. Pimple was the only councilmember who chose to abstain instead of voting to add Measure M to this November’s ballot.
According to Butt, the funds will likely go toward providing appropriate compensation to city employees, including police officers, firefighters and librarians. However, it will ultimately be up to city council to allocate the additional tax revenue if voters pass Measure M in November.