Palo Alto voters might be willing to support a funding measure in November to improve public safety and roads, but most would likely oppose a sales-tax increase, a new survey commissioned by the city indicates.
The survey comes four years after a November 2014 election in which voters approved an increase in the city's hotel-tax rate from 12 percent to 14 percent. That measure was intended to help to pay for a list of infrastructure projects that included a new public-safety building, two garages, two renovated fire stations, a new bike bridge over U.S. Highway 101 and various other bike and park improvements.
Since then, the construction market has heated up, ballooning the city's cost estimates and creating a funding gap of about $56 million in the infrastructure plan -- a hole that the City Council is now trying to fill. Last month, the council's Finance Committee commissioned the new poll to determine which tax increases, if any, would likely win the public's support.
The committee is scheduled to discuss the survey on Tuesday and consider the city's next steps for a potential November ballot.
The new survey suggests the council's options for new funding sources are somewhat limited. While voters indicated a willingness to support an increase in the hotel tax or documentary transfer tax (which is paid during property transfers), they had little appetite for creating a parcel tax or raising the sales tax – ideas that each polled below 40 percent. Hotel and real-estate taxes garnered 63 percent and 51 percent of respondents' support, respectively.
Furthermore, the survey -- conducted by Fairbank, Maslin, Maullin, Metz and Associates (also known as FM3 Research), which conducted prior tax-measure polls -- showed that voters are much more likely to support new taxes for improvements to public safety, transportation, parks, and road maintenance than for community amenities such as a new animal shelter, an upgraded Junior Museum and Zoo, enhancements to Byxbee Park or restoration of the historic Roth Building.
The project that received the most support in the survey is "ensuring a modern and stable 911 emergency communications network," which 75 percent of the respondents deemed it as either extremely (35 percent) or very (40 percent) important. Maintenance of streets and roads was second on the list, with 66 percent calling it extremely or very important, while "fixing potholes" and "safe routes for bicyclists and pedestrians" received 61 percent and 53 percent, respectively.
Far fewer respondents showed enthusiasm for providing downtown parking (44 percent), creating a safe pedestrian crossing over U.S. Highway 101 (43 percent), and improving parks, playgrounds and playfields (39 percent).
Even lower on the priority scale were recreational and cultural projects like upgrading the Junior Museum and Zoo (17 percent), upgrading Byxbee Park (10 percent) and restoring the Roth building, which is intended to serve as the future home for the Palo Alto History Museum (10 percent).
When asked about particular taxes, hotel taxes scored particularly well: 61 percent of the respondents said they would support a higher hotel tax (27 percent indicated "strong support" while 34 percent said they "somewhat support" such a measure), while 34 percent said they oppose it (they were evenly split between "somewhat oppose" and "strongly oppose," with 17 percent each).
If the city were to raise its rate from 14 percent to 15 percent, it would have one of the highest transient-occupancy-tax rates in the state, joining Anaheim, the home of Disneyland.
Increasing the real-estate transfer tax was also a relatively popular proposition, with 53 percent indicating support (25 percent "strongly supporting" and 27 percent "somewhat supporting" such a measure) and 40 percent opposing (16 percent "strongly opposing" and 25 percent "somewhat opposing").
By contrast, most respondents were generally sour on a parcel tax and downright opposed to increasing the sales tax. The idea of establishing a flat tax on every Palo Alto parcel won the support of just 40 percent of the respondents and opposition from 55 percent. The option of increasing the sales tax drew 27 percent support (with 8 percent "strongly supporting" and 20 percent "somewhat supporting").
Seventy percent oppose raising the sales tax, with 47 percent saying they "strongly oppose" this option and 23 percent saying they "somewhat oppose" it.
On a positive note, from the council's perspective, the survey indicates that voters are willing, at least in principle, to pay up to $100 per year for infrastructure projects – even if opinions vary widely about the exact taxing mechanisms and projects.
Yet it also points to a broader, and potentially more troubling, trend: Compared with two years ago, fewer residents today have confidence in where the city as a whole is going. When asked, "Would you say that things in Palo Alto are generally headed in the right direction, or do you feel that things are pretty seriously off on the wrong track?" just 43 percent chose "right direction" (down from 61 percent in 2016) and 37 percent said "wrong track" (up from 25 percent in 2016). The remainder said they didn't know.
Survey respondents also gave the city lower grades than in prior years when asked about service levels. While 60 percent still rated the city as "good" (50 percent) or "excellent" (10 percent) when it comes to providing services, the figure is lower than it was in 2016, when 74 percent gave the city the two highest ratings.
Voters also appear to have mixed feelings about the city's budget management, with 47 percent giving the city high grades, down from 64 percent in 2016. Survey respondents gave the city higher ratings when asked about maintenance of infrastructure, with 64 percent giving offering positive reviews. Even that, however, is down from 75 percent in 2016.
In its presentation of the results, FM3 noted that the trend is "common in recent months for Bay Area cities facing increasing challenges like housing costs and traffic congestion."