Voters in these Sacramento-area cities just said yes to sales tax hikes. Here’s why

Voters in a record number of California cities, including Rancho Cordova and Woodland, approved local sales tax hikes this week aimed at boosting city budgets for decades to come.

In total, 68 cities put general sales tax measures on the Nov. 3 ballot, the most ever. Of those, 57 were ahead during initial vote counts.

City leaders across the state say the tax boosts give them a locally controlled and sustainable spigot, making them less reliant on what they contend are increasingly unstable and variable shares of state and federal government tax revenues.

But the new taxes are criticized by fiscal conservatives as blank checks because cities typically don’t tell voters up front exactly how the money will be spent, allowing cities to use it for any purpose, including controversial employee pension packages.

In Sacramento County, residents of Rancho Cordova and Isleton voted this week to increase their local sales tax half-cent per dollar spent on most purchases. Rancho Cordova officials estimate the tax could cost residents $50 to $100 a year, and much of it will go to fixing streets. Isleton officials say will spend some on firefighting needs.

Citrus Heights, which is trying to re-set its economic base amid retail shutdowns, proposed Measure M, a full 1-cent tax increase. However, as of Friday afternoon, the measure was trailing by 300 votes. If Citrus Heights gets voter approval, it will use the funds to fix streets and boost the police department, Mayor Jeff Slowey said.

Woodland in Yolo County and Wheatland in Yuba County won wide voter support to extend existing sales tax increases. South Lake Tahoe in El Dorado County approved a new 1-cent sales tax hike.

“We are not going to be relying on the state and federal governments to do our job,” South Lake Tahoe city spokesman Chris Fiore said. “South Lake Tahoe is really trying to be self-reliant.”

Sales tax Measure S in Auburn, in Placer County, however, appeared headed to failure, with 53% of voters opposed in initial returns.

These week’s tax measures represent the latest wave in what has been a six-year-long trend of more cities asking residents for a little extra help. More than half of the state’s 482 cities now will benefit from direct sales tax add-ons, according to local government policy expert Michael Coleman.

Most are tacked at half-cent per dollar of purchased goods.

Business taxes

They aren’t the only type of local taxes that did well on ballots around the state this week. Voters in 24 California cities approved taxes on cannabis businesses out of 26 such measures on the ballot. That includes Marysville in Yuba County and Grass Valley in Nevada County.

In contrast, with partial vote totals in, voters statewide were saying no to Proposition 15, the commercial and industrial property tax increase that would have provided billions of dollars to local governments, including schools. Slightly less than 52% of voters opposed the measure after early returns.

Coleman of the League of California Cities said the tax hikes provide a subtle benefit for cities during an era when the local “Main Street” stores and strip malls have closed as more shoppers are buying products online. Some of the new taxes allow some sales tax from online purchases to go to the city where the shopper lives, not to the jurisdiction where the product warehouse or sales center is, which sometimes is out of state.

In Rancho Cordova, a half-cent Measure R was pitched as an all-purpose fund that could be used to pay for any type of city service. But Mayor David Sander said the city will focus much of the money on repair and maintenance of streets.

“We know we need an additional $10 million per year over a decade to get our pavement conditions up to the most efficiently managed state of repair,” Sander said. “The state and feds are not coming to our rescue. These are our own problems.”

He said the city also has $50 million worth of sidewalk work to do over time.

The city had initially hoped that a proposed countywide transportation sales tax measure this year would help all cities do that work, but that measure was tabled when county officials determined voters would reject it during the COVID-19 economic downturn.

In Woodland, where voters approved a 10-year extension of an existing sales tax, those voters also endorsed three companion measures that advised the city to use a percentage of the money for the city library, youth programs, and crime prevention.

In South Lake Tahoe, officials pointed out that the city’s successful Measure S, a full 1-cent tax on most purchases, would mean millions of visitors from outside the city would be chipping in when they made purchases, not just residents. Grocery and medication purchases are exempt.

The measure is billed as funding for wildfire preparedness, among other uses, but the tax, like many sales tax measure revenues in other cities, goes into the city General Fund and can be used for any purpose.

That has led to sharp criticism from taxpayer groups, including the Howard Jarvis Taxpayer Association, who say cities are misleading residents on the reasons for the increase. Jarvis group head Jon Coupal points out that many cities are faced with huge pension costs for retired fire fighters, police officers and other public employees.

“The (ballot measure) summary says it’s for critical government services, police, fire, kittens and puppies,” Coupal said. “It’s highly deceptive. They ought to come right out and say it is a pension tax.”

This story was originally published November 6, 2020 at 3:52 PM.