Item 5.3 - Recommendations from the
Revenue Review Ad Hoc Subcommittee and
Provide Policy Direction
City Council - October 28, 2023
2 Background
• September 9, 2025 – City Council received a briefing
on the LLAD, UUT, Cannabis Sales Tax, and other
revenue sources
• City Council established an Ad Hoc Subcommittee to
review revenue options for the support of landscaping,
lighting, and other services need
• October 7, 2025 – Ad Hoc Subcommittee met to
discuss revenue options
3 Analysis – Revenues Considered
• Utility Users Tax (UUT) extension and possible amendment • LLAD amendment
• Cannabis Sales Tax increase
• Tax on vacant properties (land, buildings, or units)
• Public Safety Parcel Tax
4 Analysis - UUT
UUT - Priority measure to evaluate for renewal,
November 2026 ballot
• Expires December 31, 2028
• $6.6 million - General Fund revenue for Public Safety, Public Works, Recreation, Social Services and other core services
• Waiting until November 2028 would create budget and
staffing uncertainty
• Loss of funding would require significant budget cuts
5 Analysis - LLAD
LLAD – Consider Updating LLAD in 2027
• Not tied to election cycle – can be done anytime
• Focus resources now on UUT; reduce competing interests:
public information and education, surveys, Council actions • Ten months to prepare
• Outreach and education
• Revise assessment report
• City Council actions
6 Analysis – Cannabis Sales Tax
Cannabis Sales Tax - Increase 2%
• Currently allowed up to 6% in Municipal Code
• Can be increase from 4% to 6% at anytime
• Requires City Council Resolution
• Approximately $200,000 increase in annual revenues
• Consider outreach to retailers prior to agendizing
7 Analysis – Tax on Vacant Property
Tax on Vacant Property – More analysis and information
needed, target future election cycle
• Purpose is to prompt development and discourage vacancies • More analysis needed
• Apply to commercial/industrial AND residential?
• Administration of tax – how vacancy determined, when
is it triggered, how is it tracked, cost to city to support? • How much revenue would be generated?
• Current litigation on similar measure – targeting a future election cycle will allow litigation to resolve
8 Analysis – Public Safety Parcel Tax
Public Safety Parcel Tax - Do not pursue now
• Public Safety Parcel Tax is a special tax - funds earmarked for public safety services
• Requires two-thirds (66.7%) voter approval
• March 2020, a renewal measure for the existing PSPT was defeated by voters (62.5% Yes)
• Polling conducted in 2023-24 showed that achieving two-thirds support would be difficult.
9 Recommendations
Seeking City Council Concurrence
1. Pursue renewing UUT and possibly
amend for the November 2026 ballot.
Authorize Subcommittee to work with the
consultants to prepare a UUT survey and
set parameters: possible increases and
timeframe for the renewal.
Consider program modifications, such as
including additional utilities
10 Recommendations
2. Target 2027 to amend LLAD No. 3.
3. Increase the Cannabis Tax as soon as
possible.
4. Prepare a framework for necessary
research on taxing vacant properties
and pursue this effort independently for
future consideration.
Allow ongoing litigation against San
Francisco’s tax to resolve.
Analysis not included in the Biennial
Budget; therefore, a budget
amendment may be needed.