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Sacramento City Council poised to OK sales tax hike measure

Published: Thursday, Jul. 19, 2012 - 12:00 am | Page 1B
Last Modified: Thursday, Jul. 19, 2012 - 8:08 am

The Sacramento City Council is expected to move forward tonight with placing a measure on the November ballot seeking to raise the sales tax rate in the city.

An overwhelming majority of the council has expressed support for raising the sales tax as a way to produce revenue for core city services. Council members' confidence in the measure was bolstered earlier this year by a poll showing that a majority of city residents support a tax increase to fund general operations such as police, firefighters and parks.

While city staffers have asked the City Council to decide tonight whether to place the measure on the ballot, a final council vote on the matter may not take place until Tuesday as some last-minute additions are considered for the ballot measure.

Councilman Kevin McCarty told The Bee's editorial board this week that he will propose adding a six-year "sunset" term on the tax hike, as well as annual audits of how the new revenue is being spent and the creation of a citizens' oversight commission to track the spending.

According to a poll conducted this spring, 68 percent of voters would support a half-percentage-point increase in the city sales tax. That boost would generate an estimated $31.4 million for the city each year, according to a city staff report.

Support was even stronger for a quarter-percentage-point addition to the sales tax, an increase that would bring in $15.7 million each year for the city.

It would take a simple majority of voters to approve either tax increase.

The city's current sales tax rate is 7.75 percent. An increase of half a percentage point would tie Sacramento with Galt for the highest sales tax rate in the region.

"Our service levels have been cut so much that people feel enough is enough," said Councilman Steve Cohn.

While McCarty and Councilman Darrell Fong said they were supportive of the larger increase, Cohn said he was concerned what impact that hike might have on the region's ability to pass a transportation tax in two years.

Mayor Kevin Johnson and business interests have already expressed their opposition to a new sales tax.

The mayor said in May that he'd rather have the city concentrate on stimulating business growth than rely on increased taxes for revenue. He also warned that citizens are looking at city officials "very closely and we're trying to restore faith and confidence."

Still, the council will likely have the support of the city's unions as it moves forward with a new tax. And that union support could be universal, depending on how the council decides to spend the added tax revenue.

Council members said they might draft an outline before the election of how the added tax revenue could be spent. Should that discussion include spending a "proper" portion of the new revenue on the Police Department, the police union would likely support the campaign, said the union's acting president, Dustin Smith.

"Under the right circumstances, it is something we would favor very heavily," Smith said.

The larger tax increase could generate as much as $13 million a year for the Police Department – enough to fund roughly 130 officers, council members said.

McCarty and others have discussed directing new tax revenue toward city departments whose employees have agreed to increased pension contributions.

While police union leaders and city labor officials are in talks, police officers do not pay anything toward their pensions. The city's other large unions have all agreed to increase their pension contributions in recent months.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Ryan Lillis



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