Idea to increase local sales tax floated
As the state continues to siphon money from city and county governments to help stanch its own fiscal bleeding, the idea of self-inflicted tax increases is beginning to take hold.
In Chico, a group of community leaders last week proposed a .75-percent sales-tax increase that, since it was made public, has created a bit of a stir. It would bump up the tax on products purchased within the city limits from the current state-base level of 7.25 percent to 8 percent. That would translate into a projected revenue increase of $12 million per year.
This would come on the heels of a 1 percent drop in that state-base tax that occurred in July because Gov. Jerry Brown couldn’t get the Legislature to continue a temporary increase that was signed into law by Gov. Arnold Schwarzenegger five years ago.
Sales tax is the city’s largest source of revenue. Combine the 1 percent loss with the state’s keeping about $500,000 in vehicle-licensing fees from the city this fiscal year, along with the increasingly likely loss of redevelopment funding for capital projects, and the idea of Chico voters choosing to tax themselves doesn’t sound so far-fetched, if they can learn the details.
Former Chico City Manager Tom Lando and Jim Stevens, an owner of NorthStar Engineering, are behind the tax proposal. Lando runs a consulting business located in the same building as Stevens’ firm.
“It would be a program that would be administered by the city,” Stevens explained. The city would collect the extra revenue and then distribute it to the specified recipients.
“Our understanding of the way these ballot measures work is they have to be very specific as to the distribution,” Stevens said.
Those specific programs at this point would include the addition of 15 police officers, funding for high school sports, theater and arts, library operations and a “pothole fund” for street maintenance. The list also includes funding to help keep open the Bidwell Mansion State Historic Park.
The list also calls for the leveraging of the increased revenue into bonds to build new facilities, which at this point would include a new police station, a new fire station, a community center, a baseball field to house a team with a Major League affiliation, an aquatic facility and rehabilitation of the Veterans Memorial building on The Esplanade.
“Our challenge is to make that list specific enough to where the electorate will trust that it’s not going to be taken away, stolen, borrowed, abused and the like for other things,” Stevens said. “In the last week and a half, since all of this stuff kind of broke, we’re getting a majority approval of the idea as it stands now.”
Stevens said the measure of approval comes from talking with community members and fielding phone calls and emails.
“I haven’t got any negative phone calls, but I did get one negative email saying that people just don’t like taxes,” he said. “And I’ve heard some comments from people saying a tax is a tax is a tax. Well, the difference here is that it is locally controlled. And the folks who control it are going to be accountable locally.”
City Attorney Lori Barker said such a proposal—a tax increase for specific spending—takes two-thirds voter approval and can be held only during a general election, which happens in November of even-numbered years.
It would also take five of the seven council members to approve putting the measure on the ballot.
The council members themselves are understandably careful about commenting on the tax-increase proposal.
“I like the idea of being able to provide the most services for the community that we can afford,” said Vice Mayor Jim Walker. But he suggests maybe keeping the council out of it and going straight to the voters.
“The whole idea is kind of foreign,” he said. “I don’t know why they wouldn’t just petition an initiative and put it on the ballot.”
Councilman Mark Sorensen said there are too many questions at this point for him to comment, but he did say he wasn’t “interested in supporting a regressive tax.”
When approached for his take on the effort, Councilman Scott Gruendl quipped, “You know, I think this is the first time I’ve ever really stopped and thought about what I was actually going to say before I answered a question from the press.”
He said he thinks it’s a good idea and says the promoters are going about it in a good way.
“Jim [Stevens] and Tom [Lando] are smart,” he said. “They need to allow the community to vet all of this. The fact is we should have started this discussion a long time ago. The [current] police station is a facility that met its life expectation about four years ago. And now here we are.”