Where the money comes from
Menlo Park's main operating fund collects about $88 million a year. Almost all of it comes from just a handful of sources.
This page is about the General Fund— the City's main checkbook, the one that pays for everyday services. Here is where that roughly $88M comes from each year:
- Property tax$37,022,153≈ 42% of the fund
- You pay this if you own a home or business property in Menlo Park. The City gets a share of the property-tax bill the County collects. It is the single largest source — and the steadiest.
- Transient occupancy tax (hotel tax)$18,404,642≈ 21% of the fund
- A tax on hotel and short-term rental stays. Visitors pay it on their bill; residents usually don't pay it directly. Voters raised the rate in 2024, which is why this line has grown.
- Charges for services$8,450,119≈ 10% of the fund
- Fees the City charges for specific things — recreation programs, plan checks, and similar services where the user pays part of the cost.
- Sales tax$7,207,900≈ 8% of the fund
- You pay a sliver of this every time you buy something in Menlo Park. Most of the sales tax goes to the state; the City keeps about one cent of every dollar.
- Building permits & development fees$5,652,632≈ 6% of the fund
- One-time fees collected when someone builds something new. This line rises and falls with what's being built — which is why big projects matter to the City's bottom line.
- Everything else$11,244,783≈ 13% of the fund
- Franchise fees from utilities, business licenses, interest income, transfers, fines, and a long tail of smaller items.
A note on stability
Property tax is the most stable line — it grows slowly and predictably. Hotel tax and building permits swing a lot from year to year, depending on hotel occupancy and what's under construction. When City staff talk about “budget uncertainty,” they almost always mean those two.
A note on what isn't here
The General Fund doesn't include water, garbage, or stormwater — those are paid for by separate fees and tracked in their own funds. The next page explains that split.
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General Fund revenue is summed from the budget records for fiscal year 2027 (view v_revenues, General Fund only), grouped by revenue type. The named lines total $87,982,229; smaller lines are rolled into “Everything else.”
Why property tax looks flat
Property tax is the City's biggest revenue source, and the total has barely moved — about 0.6% a year from FY 2023 to FY 2027. But that flat line hides two forces pulling in opposite directions: the underlying secured tax base has grown about 3.6% a year, while the state's VLF backfill component has been clawed back about 18.7% a year. The growth is real; the state has been taking back roughly as much as the base adds.
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Compound annual growth FY 2023 through FY 2027, from the City's FY 2026-27 budget staff report (June 9, 2026): secured base $20.58M → $23.74M (3.6%/yr), VLF backfill component $6.95M → $3.02M (−18.7%/yr), total $36.15M → $37.02M (0.6%/yr). The endpoints are shown; the line between them is the compound trend.