Jul 23, 2008

Airport companies protest proposed taxes

Supervisors delay decision but say budget gap must be closed

By Shaun Bishop / Daily News Staff Writer

New taxes on parking and rental car companies in unincorporated San Mateo County would spell disaster for airport businesses struggling in a slumping economy, company officials said Tuesday.

Representatives from the rental car businesses convinced the Board of Supervisors to delay a decision on the proposal, which would put measures on the November ballot to levy an 8 percent tax on parking facility operators and a 5 percent tax against rental car companies.

Supervisors Rich Gordon and Mark Church quietly proposed the taxes to help close a $25 million gap between spending and revenues in this year's budget before it blooms to $90 million by 2013.

"Certainly any new tax on the ballot is never a popular proposal," Church said, "but we need to explore all options if we are to eliminate the structural deficit."

The county said the parking tax on gross receipts would raise about $4 million per year, and the car rental tax would raise an estimated $15 million annually.

Both would mostly impact companies at San Francisco International Airport, which is located in unincorporated San Mateo County. Officials from those companies said they were blindsided by the proposal and worried about the effect it could have.

"We have not had a chance to truly evaluate the tremendous impact this ordinance would have on our business," said Leonard Almalech, vice president and general manager for Enterprise, Alamo and National, who said the county never contacted his company about the proposal.

Lorraine Tallarico, regional director of properties and facilities for Avis and Budget, said the tax would be "a death knell for our business at one of our area's major airports" at a time of "financial crisis."

Supervisors noted that the extra costs may be passed through to consumers, but said the taxes - especially the rental car tax - would likely pose a greater impact for tourists than county residents.

Gordon said he and Church, members of the finance and operations subcommittee, drew up the ordinance quickly because they were told Tuesday was the last day to introduce a measure for the November ballot in order to qualify it for an Aug. 8 deadline.

Since state law requires general taxes to appear in the same year, supervisors are up for re-election, the county would have to wait until 2010 if the measures don't appear in November.

But County Counsel Michael Murphy said the Aug. 8 deadline is flexible, and said the board could consider the items at its Aug. 5 meeting.

"I think the committee might have taken a different approach if we knew we had additional time," Gordon said.

Church said the county would hold discussions with parking and rental companies before making a decision. The measures would need four of five supervisors to put it on the ballot and a majority approval from voters to pass.



E-mail Shaun Bishop at sbishop@dailynewsgroup.com.