El Cerrito’s Tax Dilemma: A Call for Accountability and Transparency
El Cerrito boasts one of the most robust tax bases in California, yet there’s an ongoing push for even higher taxation. Alongside this, questions arise about the city’s responsible use of the previously approved taxes.
Sales Tax in El Cerrito
As of October 2023, El Cerrito’s combined sales tax rate is 10.25%* encompassing state, county, and city tax rates. This places El Cerrito among the cities with the highest sales tax in California yet the city struggles to align expenses to this high tax base.
Understanding Property Tax
California sets the foundational property tax rate at 1%, giving homeowners a straightforward method for estimating potential property taxes. However, the actual tax rate may vary throughout the city.
To determine property tax, properties are periodically appraised to establish their fair market value. Facto s influencing appraisals include:
- Comparative property sales in the vicinity.
- Distinct property features, such as pools or garages.
Despite fluctuations in market value, a property’s assessed value can increase only by up to 2% annually unless there are significant alterations or ownership changes.
Example:
A 2-bedroom home in El Cerrito with a garage valued at $450,000 and a tax rate of 1.11% would have an annual property tax of $4,995.
Real Property Transfer Tax (RPTT)
El Cerrito has a history of promising to spend the money for a specific purpose and then allocating the revenue into the general fund for multi-purpose use.
Since January 14, 2019, El Cerrito has imposed a 1.2% RPTT on property sales. For instance, a property sold for $1.5 million results in a $18,000 tax for the city. The City has collected more than $14 million in revenue since 2020 – enough for 2/3 of the estimated cost of a new library.
Although this tax was promoted to support local amenities, the senior center was defunded, and now there’s a push for a new library paid for by NEW TAX MONEY.
Seeking Greater Transparency
Recent City Council meetings have highlighted discrepancies in financial reporting, with significant financial items omitted from Council and public discussions. The City Manager’s approach of presenting budgets to the Financial Advisory Board without ample time for proper review and refusal to allocate time for adjustments also raises significant concerns.
The City Clerk, acting as El Cerrito’s primary information custodian, appears selective about the information released under the Freedom of Information Act. This selectivity often favors the city’s image, sparking concerns about transparency, accessibility and alignment with California law.
Additionally, the Council has rescheduled discussions for the library, initially set for November 7 to November 21. Notably this falls during Thanksgiving week, when many El Cerrito residents may be preoccupied with holiday preparations or travel plans, potentially missing out on the critical discussion.
Fiscal Concerns
Beyond transparency issues, there’s the overarching problem of fiscal mismanagement.
The City has not been fiscally responsible in over a decade, sending the City to the brink of bankruptcy, avoiding and ignoring public input and constantly circumventing the Financial Advisory Board by not presenting relevant matters for consideration. Then, the City turns to taxpayers for ongoing day-to-day operations that should be part of the budget, like the library and senior center.
The City has recently seen an uptick in its bond rating, moving from BBB- to BBB. While this has been touted by the City as a significant achievement, it’s essential to put this in context. When the current City Manager assumed her position, the City boasted an AA- bond rating. Regrettably, during the initial years of her leadership, this rating declined to BBB-. To offer further perspective, a BBB- rating is just a notch above junk bond status. So, while a shift to BBB is a step in the right direction, it’s crucial to recognize there’s still a considerable way to go.
Also noteworthy: the slight improvement was compliments of the Federal Bailout temporarily balanced the budget and added to the general fund – not fiscal prowess as City leadership suggests.
There’s a looming $85 million unfunded pension liability that has been ignored. The City Manager has depleted reserves half the GFOA recommended amount, leaving the city with few options if expenses exceed revenue.
Still, there’s no Senior Center; they want us to pay $21 million for a library for a city with 25,000 residents.
A Need for Better Leadership
El Cerrito’s leadership needs to address these concerns head-on rather than ignoring them. Actual progress will only come with transparency, responsible fiscal management, and genuine leadership that serves the interests of its residents.
If the City Manager focused on core city responsibilities and prioritized public engagement instead of spending time and resources on frequent trips, our city would undoubtedly benefit.
Help bring awareness to the El Cerrito happenings:
– Share this post with other residents.
– Voice your concerns. Write to the city clerk at cityclerk@ci.el-cerrito.ca.us and ask that your comments be added to the next board packet.
– Report on Next Door
– Council meetings are remote and in-person, but public comment is now
limited to in-person attendees. The City Council meeting will be on November 7.
– If you want to contact City Council Members or the City Managers, all their
emails are below.
– Karen Pinkos-City Manager kpinkos@ci.el-cerrito.ca.us
– Councilperson Gabe Quinto gquinto@ci.el-cerrito.ca.us
– Councilperson Carolyn Wysinger cywysinger@ci.el-cerrito.ca.us
– Councilperson Tessa Rudnick trudnick@ci.el-cerrito.ca.us
– Mayor Lisa Motoyama lmotoyama@ci.el-cerrito.ca.us
– Councilperson Paul Fadelli pfadelli@ci.el-cerrito.ca.us
* corrected to 10.25%
El Cerrito Committee for Responsible Government (ECCRG) 