Sunnyvale to reconsider property transfer tax ballot measure

Sunnyvale officials are considering a property transfer tax ballot measure for a second time.

The Sunnyvale City Council on Tuesday voted 5-1 to discuss—at a future meeting—putting a property transfer tax on the November 2024 ballot. Councilmember Russ Melton dissented and Councilmember Alysa Cisneros was absent.

Councilmembers will begin discussing the details of the tax early next year, which if ultimately approved by voters would bring more revenue into the city to help meet service and budget needs.

Mayor Larry Klein and Councilmember Richard Mehlinger reintroduced the discussion, hoping to find various ways the city can meet demands.

“There’s not a lot of flexibility on kicking off new programs and having funding to implement some of the measures we’re looking at unless we talk about cutting service levels,” Klein told San José Spotlight.

The city council previously discussed a property transfer tax in 2022, but the last-minute proposal was deadlocked and never made it on the ballot. The 2022 proposal would have added a 0.75% tax on all property transfers of $4 million or more. The money generated from the tax would have been set aside for supportive services and other liabilities, such as the city’s pension plan.

Melton, the single dissenter on Tuesday, hasn’t changed his mind since the 2022 vote. He said the future discussion will require city employees to research options for a new tax proposal, which would take their efforts from other projects happening in the city.

“I’ve seen this movie before and my no vote was to save time for staff,” Melton told San José Spotlight.

Although the property tax issue was on the council’s agenda as early as October, meetings repeatedly ran late and the item was never discussed. Councilmembers are concerned that city employees will have less time to research the measure and poll residents eligible to vote before the August deadline to file for the November 2024 election.

The proposed transfer tax is inspired by San Jose’s Measure E, a tax on all property transfers of more than $2 million. Those funds are allocated toward affordable housing.

Previous polling sponsored by Sunnyvale regarding the proposed 2022 tax showed that out of more than 400 respondents, about half consistently supported the transfer tax.

Ryan Carrigan, government affairs director for the Silicon Valley Association of Realtors, said the association is following the process and how the tax might affect homeowners in the city.

“We certainly don’t want homeownership to become unachievable in Sunnyvale,” Carrigan told San José Spotlight.

Mehlinger, who wasn’t on the city council in 2022, said he followed the previous tax proposal closely and didn’t think the then-proposed $4 million threshold would affect many single-family homeowners.

He said he’s looking forward to discussing the matter with other councilmembers and is interested in hearing other ideas to address budget needs.

“The Sunnyvale way is that we don’t leave things to the last minute,” Mehlinger said. “We tackle these things head on and we tackle them as early as we can.”

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X, formerly known as Twitter.