CITY OF SAN MATEO
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 24 Section Name: NEW BUSINESS Account Number: 10-1311 File ID: 26-11291 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: City Manager's Office
MEETING DATE: June 15, 2026
SUBJECT:
Tracking Survey Results for the Potential Sales Tax Measure for November 2026 — Informational RECOMMENDATION:
Receive a presentation from the City’s consultant, True North Research, concerning the potential sales tax measure tracking survey results.
BACKGROUND:
At the April 20, 2026, budget study session, staff provided a preview of the fiscal year 2026-27 budget which estimated a $16 million deficit for the General Fund, the City’s primary operating fund providing essential services such as public safety, transportation, library and parks and recreation services. At that same meeting, City staff provided an update to the General Fund 10-year forecast and presented four different scenarios highlighting various threats to the City’s top revenue sources. Even with the most optimistic scenario, in which the City receives 100% of property tax in-lieu of Vehicle License (VLF) and the Real Property Transfer Tax remains in place, the General Fund is expected to have deficits for the next several years. The structural deficits, a result of costs rising faster than revenues, are estimated to be between $5-7 million per year assuming some personnel savings and fewer General Fund contributions to capital.
At the June 1, 2026, City Council meeting, staff provided the proposed budget for FY 26-27, which included projected expenditures exceeding projected revenues by $17 million. Due to this estimated budget deficit and the anticipated budget deficits that have been projected over the next several years, the City has been implementing a Financial Sustainability Plan. As part of this plan, staff continues to review opportunities to reduce General Fund expenditures, improve cost recovery and cost allocation, pursue grant opportunities, strategize Citywide economic development, and enhance revenues. One of the revenue enhancement options proposed is to place a tax measure on the November 2026 ballot to bring in additional funding to bridge the current structural deficit and allow the City to maintain current city services within the General Fund budget.
City staff started reviewing potential ballot measure options with the Revenue Measure Ad Hoc Committee in August 6, 2025. Then staff reviewed the potential ballot measure options with the full Council on August 16, 2025. Council expressed a desire to better understand San Mateo voter sentiments regarding a 1/4 cent transactions and use (“sales”) tax and a General Obligation Bond, and polling was conducted through a statistically reliable survey in November 2025.
At the January 7, 2026, City Council Ad Hoc Committee meeting, and the January 12, 2026 City Council meeting, City staff and True North Research presented the results of the Baseline Revenue Measure Survey. The Ad Hoc Committee on January 7, (Deputy Mayor Fernandez and Councilmember Cwirko-Godycki) and then the full Council on January 12, recommended to continue educating and informing the community about the potential 1/4 cent sales tax measure. The Ad Hoc Committee stated that since the City still has 1/4 cent of capacity left before reaching its sales tax limit, it’s important
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to act now and keep the 1/4 cent of sales tax within the City. If another entity places a sales tax measure on the ballot before the City reaches the limit, the City may no longer have the option to add sales tax for local funding. The Council also recommended that the City pause education and outreach for the general obligation bond based on the Final Ballot Test results, and the need for two-thirds approval.
After Council direction was received in January, staff has spent the past six months educating and informing the community. This outreach includes meeting with many community stakeholder organizations including nonprofits, neighborhood associations, the business community, and hosting five district educational sessions. Staff is also providing educational information to the community in the form of mailers and a City dedicated informational website.
Transactions and Use Tax (sales tax) Information
The City can add a transactions and use tax, also known as a district or local add-on sales tax, on top of the regular sales tax. A sales tax applies to merchandise that is delivered within a jurisdiction and does not apply to grocery items or prescription medicines. San Mateo voters approved Measure S, a sales tax, in November 2015, which extended Measure L, a 1/4 cent sales tax. Since the passage of Measure RR in November 2020 to support Caltrain operations, the sales tax rate in the City of San Mateo has been 9.625%. The State of California imposes a limit of two percent above the statewide base sales tax rate (7.25%). Since 0.625% of the City’s current sales tax is exempt from this limit, the City still has 1/4 cent of capacity left before reaching the limit. In order to pass, this measure would require a simple majority (50% plus 1) voter approval, and the proceeds can be used to fund general municipal services, such as:
keeping streets, sidewalks, parks, infrastructure, and community facilities safe, clean, and well-maintained fixing potholes
providing quick responses to 911 emergencies
paving and maintaining local streets and roads
providing fire protection and paramedic services.
Survey Methodology and Objectives
Between May 11 and May 15, 2026, True North Research administered the survey to a stratified and clustered random sample of 689 registered voters in the City of San Mateo who are likely to participate in the November 2026 election. The survey followed a mixed-method design that employed multiple recruiting methods (email, text, and telephone) and multiple data collection methods (telephone and online), with an average interview lasting 16 minutes. The survey provides statistically reliable results, with a margin of error due to sampling of +/- 3.7% at the 95% confidence level.
Key Findings
Voters have a high regard for the quality of life in the City of San Mateo (85% rate it as excellent or good) and are generally satisfied with the City’s provision of services (80% very or somewhat satisfied). These sentiments translate into solid natural support (58%) for establishing a 1/4 cent sales tax to provide funding for city services in San Mateo, such as keeping local streets, sidewalks, parks, infrastructure, and community facilities safe, clean, and well-maintained; fixing potholes; providing fire protection, paramedic, crime prevention, and 911 emergency response; and improvements to traffic safety/traffic management. The natural level of support for the measure was 8% above the simple majority (50%+1) required for passage of a general tax. Moreover, despite the recent war in Iran and spiking fuel prices, natural support for the proposed sales tax was 5% higher in this Tracking Survey than in the Baseline Survey conducted in November 2025.
The results of the Tracking Survey indicate that a general sales tax measure continues to be feasible for the November 2026 ballot provided that it focuses on the projects and services that voters identify as their priorities and is accompanied by effective community/opinion leader engagement, education, and communication.
Although the San Mateo City Council would have the discretion to decide how to spend the revenues, the Tracking Survey results indicate that voters continue to be primarily interested in using the proceeds to fund public works and public safety, including keeping streets, sidewalks, parks, infrastructure, and community facilities safe, clean, and well-maintained (88% strongly or somewhat favor), providing quick responses to 911 emergencies (84%), providing fire protection and paramedic services (83%), and fixing potholes (83%). That said, it is worth noting that every potential use of sales tax proceeds tested
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was favored by at least two-thirds of voters surveyed.
In addition to the quarter cent sales tax measure, Council has directed staff to explore a Charter Amendment that would update and streamline the Charter to:
reflect the transition to district elections that has already occurred allow additional time to fill City Council vacancies
allow the day and start time of Council meetings to be specified by resolution permit flexibility in the process of selecting a newspaper for official notices and remove outdated language
51% support this Charter Amendment, 20% do not support it, and 28% were unsure or did not share their position. Staff will consider the ballot language for the Charter Amendment carefully to ensure that the community understands what is being considered.
The San Mateo Sales Tax Tracking Survey Report can be seen in full in Attachment 1.
Additionally, City staff have inquired with the County on whether they plan to opt out of AB 1416 (listing of measure proponents and opponents on the ballot).
Next steps
Staff will continue to engage in an educational outreach effort to inform the community about the potential November 2026 sales tax measure through mid-July 2026. At the July 20 City Council Meeting, the Council will decide on whether to put the quarter cent sales tax measure, and the Charter amendments, on the November ballot. After July 20, staff will cease all outreach. State law requires that the City no longer spend City resources or staff time on outreach to the community once Council makes a final determination that an item will be placed on the ballot.
BUDGET IMPACT:
There are no costs associated with receiving this report. Funding for consultant services is currently budgeted within the City Manager’s professional services budget.
ENVIRONMENTAL DETERMINATION:
This item is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Sales Tax Tracking Survey Report
STAFF CONTACT
Zachary Reda, Senior Management Analyst
[email protected]
(650) 435-0823