The Visalia City Council is weighing a ballot measure this fall that would increase the city sales tax to perhaps by one quarter percent to 8.50%. A blue ribbon task force has been meeting this summer to recommend whether to submit the matter to voters.
This week the task force committee voted overwhelmingly “no” on an increase in the tax. Twenty seven of the hirty eight task force members at the June 18 meeting voted no. More on their reasoning later.
Like the community the city council is divided on the issue even as sales tax returns in the city and across the state have finally shown some improvement.
Council member Warren Gubler points to a June city budget session where staff reported that Visalia was ahead of budget projections on sales tax revenues.
“What I think is notable is that after the city council had adopted a balanced budget for 2013/14 (as part of the 2 year budget cycle), sales tax revenues are ahead of projections by $2,315,500, and total revenues in excess of budget are$1,892,630! “
Gubler said he shared the info with the blue ribbon tax force committee.
“I think these numbers are indicative of an improving economy locally, and should be in the mix when considering whether to impose another sales tax increase on local citizens. If these projections hold up, and the residential real estate market continues to improve, Visalia should be coming out of tough budgetary times, calling into question the need for another sales tax increase.”
Indeed, Visalia forecasts a record-setting $24.1 million in sales tax revenues in the year ending June 30, compared to a high of $23.2 million in 2006-07 – before the recession hit.
Thank higher car sales and better retail numbers at several large new box stores in town. Car and truck sales were up around 25% from 2011-12 statewide.Home improvement stores sales have also bounced back due to the healthier housing economy.
On the other side of the coin is council member Greg Collins who points to staff reports that suggest the city budget has a long way to go to recover from the recession.
Collins says Visalia employees salaries have been stuck at 2008 levels and are just now slated to rise 1% after five years. Deferred maintenance on city facilities around the community is clear as well.
Depleted city reserves that once were as high as $15 million in June 2009 have declined to to $1.3 million as of last June but with new monies coming in should get to $5 million by June of next year.One bit of help the city is getting $1.9 million from the county in a legal settlement.
Still,city reserves are low after five years of red ink.
“We could squeak by I guess” says Collins,without a sales tax increase ”but the question is whether this is the kind of city we want to be.“
A staff presentation to the blue ribbon group last month pointed to why the city city might want to increase the sales tax perhaps another 1/4 percent to 8.50 percent.
The state takes away city property tax revenues it once counted on. Visalia loses about $3 million a year on property taxes but imposes no utility tax like other cities do to make it up. In addition, the state killed the redevelopment agency that had helped to finance local improvements.
Visalia’s historical sales tax dominance has faded.
Visalia imposed a 1/4 percent increase in the sales tax in 2004. Another 1/4 percent increase would raise $5 million for the city.
The city task force,led by Council-appointed co-chairs Gary Gagliolo and Janice Avila weighed in June 18 recommending not to peruse a sales tax measure arguing three key points.
1.While the City has demonstrated that there are needs and wants exceeding current revenues, it has not demonstrated that these items must be addressed immediately, nor that the only means of addressing them is a new tax stream. In essence, a sense of “crisis” has not been created around these issues sufficient to justify a response of the magnitude represented by a tax increase.
2.Based on the City’s mid-year budget report, it appears that revenues are beginning to rebound as the economy picks up energy and confidence. The City was able to generate a budget surplus in the current year and is now projecting an even larger surplus for the coming year. While these improving revenues will not cover all needs, they do point to opportunities for future resources that can be used to address at least some shortfalls.
3.The survey conducted between May 30 and June 3, 2013, of likely November 2013 voters indicates that adequate support does not exist to ensure passage of the measure. The responses to the survey indicate that the City has not yet successfully convinced the electorate of the immediacy of their need, and the Task Force does not believe that time or resources are available to materially change this situation before this election.
Of course it’s still up to the city council expected to decide next month.
If the Council votes to put the measure on the November ballot, city officials would have to submit the paperwork to Tulare County by or around Aug.10.
California cities and counties vary on the level of sales tax they impose. Visalia currently stands at 8.25%,Tulare County has an 8% rate;Fresno city has 8.225%,City Of Tulare has a 8.5% rate and Selma 8.72%. On a statewide basis higher rates can be seen in Los Angeles, CA (9.75%), Oakland, CA (9.75%), Fremont, CA (9.75%) and San Francisco, CA (9.5%).
Tulare County’s extra half cent sales tax measure – Measure R – is making possible major improvements to Tulare County’s transportation system and is included in the total 8% as well as Visalia’s 8.25%.
Unlike in some places,Visalians have voted in the affirmative to raise their sales tax in 1994 and again in 2006 for Measure R.