A quarter-cent sales tax increase in San Mateo is slated to go into effect April 1 and is estimated to bring more than $3 million a year to the city for the next eight years.
San Mateo business owners said the tax is a minor increase that would not deter customers from making purchases.
Lynne Fitzgerald, owner of She Sells Resale, a consignment and antique furniture store on 25th Avenue, said that even with the tax increase, business is already better than last year.
“I have found the biggest factor in buying or not buying is a customer’s ability to spend home equity,” she said.
According to San Mateo finance director Hossein Golestan, the city will receive an estimated $3.3 million in increased revenue each year for the next eight years from the tax.
Sales tax will be 9.5 percent on goods sold within San Mateo starting April 1. Currently, the sales tax is 9.25 percent.
Voters overwhelmingly approved the increase in November.
San Mateo is projecting a $6 million budget gap next fiscal year, Golestan said.
The city operates on a $78 million general fund budget. Though revenue from the sales tax increase will go directly to the general fund, Golestan said, the revenues are not enough to bridge the gap, so other measures and cutbacks will be needed.
“A combination of position maintenance such as freezing vacant positions, labor concession and the use of capital project funds for projects that don’t need to be done immediately will be looked at,” he said. “It’s a three-pronged approach.”
Ed Kaufman, owner of “M” is for Mystery, a bookstore on Third Street, said if the increase benefits schools, fire and police, it is a small price to pay for services.
“If the city needs the money, I applaud it,” he said. “Most people that come in here don’t even know what the sales tax is and would only notice if it went from 9.25 percent to 10.25 percent.”
Arguments against the tax measure came from residents who objected to the eight-year time frame, according to SmartVoter.org, San Mateo County’s voting resource Web site.
Sales tax in Bay Area cities as of April 1:
San Mateo: 9.5 percent
Daly City: 9.25 percent
Burlingame: 9.25 percent
Redwood City: 9.25 percent
San Francisco: 9.5 percent
Oakland: 9.75 percent
San Jose: 9.25 percent
Source: California State Board of Equalization