HomeMy WebLinkAboutFin Nine-Year, One-Quarter Percent Transactions and Use Tax Ballot Measure PPTTRANSACTIONS
AND USE TAX
MEASURE
CITY COUNCIL
MEETING
JULY 20, 2020
REVENUE GENERATING
INITIATIVE
Steep downturn in economic activity resulted in projections of
an $11.8 million deficit has put many essential services at risk
Nine-year (9), one-quarter percent (0.25%) transactions and
use tax (sales tax)
Results in a $3.4 million annual increase in revenues; $30.6
million over a nine-year period
WHY THIS?
Cost burden is spread across residents and visitors
•Groceries and prescription medicine are exempt,
reducing the burden to residents on fixed incomes
Structured as a general tax to provide flexibility
This is the last one-quarter percent of local sales tax
available under the sales tax cap established in state law
It's a modest amount that goes a long way
HOW DOES SALES TAX
WORK?
State portion which is 7.25% in which cities receive 1%
Local jurisdiction portion allows up to 2% of which 1.75% is
already taken
If measure is passed, rate would be 9.25% bringing it
back to where it was prior to January 1, 2017
WHAT IF THIS PASSES?
Will allow the City to maintain top priority and essential
services
Will bridge the gap for the next 9 years until the City
experiences a 60% reduction in its pension expenses;
expected in 2030
WHAT IF THIS DOES NOT PASS ?
Would result in further negative impacts to our businesses and
residents in the areas of economic vitality, neighborhoods,
and quality of life
•Increase in emergency response time
•Curtail the process in removing barriers to affordable
housing
•Delay in building/planning/encroachment permits and
inspections
•Would end resident programs such as sidewalk repairs
RECOMMENDED ACTIONS
(1) To add a new nine-year, one-quarter percent transactions
and use tax at the General Municipal Election to be held
Tuesday, November 3, 2020; and
(2) Directing the City Attorney to prepare an impartial
analysis of the measure
ADOPT A RESOLUTION
