Sacramento city and county leaders next week will consider a plan to share revenue from auto sales.
If approved, the deal would allow the economic development departments of the two entities to steer an auto dealer to the best possible site, officials said, rather than battling over sales tax revenue.
The auto industry is slumping both locally and nationally, and city and county leaders said the deal provides the flexibility needed to move with the market, whether that means a Natomas auto mall or a downtown auto showroom.
Supervisor Jimmie Yee called the deal a "win-win" that would increase the economic fortunes of both the city and county.
Under the proposed deal – which goes to the City Council on Tuesday and the Board of Supervisors on Wednesday – each jurisdiction would keep its base auto sales tax revenue and split 50-50 any revenue growth from existing dealerships and new dealerships.
The current base sales are about $3 million annually for the city and $7.6 million annually for the county. Under state law, 1 percent of the sales price of new and used automobiles goes to the jurisdiction where it was sold.
"This collaborative effort demonstrates the commitment of the city and the county to Sacramento's economic future," said Mayor Heather Fargo, in a prepared release.
Katina Rapton, general manager of Mel Rapton Honda in Sacramento, said, "So much of what we do as consumers and residents of the city and county crosses over that it makes no sense for one or the other (jurisdiction) having less revenue."
Sacramento-based Niello Co., which operates 13 mostly high-end foreign auto dealerships in Northern California, operates a handful just outside the city limits. Company President Rick Niello said he's not opposed to the plan.
"It certainly seems that they have some empathy and heightened sensitivity to what is going on in the car business," Niello said.
Call The Bee's Ed Fletcher, (916) 321-1269.
