Elk Grove put a sales tax hike on November ballot. Can it pass as voters deal with inflation?
Vaughan Evans was done. His water bill by his count had gone up 60% in the last five years. PG&E, SMUD, the grocery store and the gas pump, you name it, the bills keep rising.
Retired, disabled, an Army veteran, Evans of Elk Grove all but threw up his hands at the prospect of another price hike — Elk Grove’s proposed 1% sales tax increase that goes to voters in November.
If passed, Elk Grove’s sales tax would rise from 7.75% to 8.75%, tying the city with Rancho Cordova and Sacramento for the highest rate in the four-county Sacramento region. Tack on a proposed half-cent countywide tax for transportation improvements that Sacramento County voters also will consider in November and the total sales tax rate rises to 9.25%.
The Elk Grove vote comes as Californians cope with record-breaking inflation. Prices in the month of July were up 8.5% nationwide from a year ago, according to the Bureau of Labor Statistics, tightening household budgets to an extent not seen in 40 years.
“It’s more taxes,” Evans told Elk Grove City Council last month. “I’m retired. It sure ain’t the time. You need to make do with what we have because it ain’t a good time. You didn’t say a quarter-cent or a half-cent (increase). You said one cent. That’s bold and arrogant. Let’s have some heart, some decency and some common sense about our money.”
Elk Grove would receive $21.3 million a year from the hike, if voters pass the measure, called the Elk Grove Safety/Quality of Life Measure, on the Nov. 8 ballot.
The added revenue, the city said, would go to pay for more police officers to tackle rising property and violent crimes, address homelessness, improve emergency services and speed response times, repair and maintain roads, streets and the city’s 100 neighborhood parks.
Elk Grove wants to hire 27 more police personnel over the next five years. City Manager Jason Behrmann said some $2 million a year will be needed to maintain and improve city streets and roads and relieve traffic congestion.
“How do we properly address that?” Behrmann said of homelessness at the July meeting. “It takes resources.”
Elk Grove officials say they have support. They cite surveys of approximately 1,500 residents in December 2021 and July along with the results of a series of community conversations Elk Grove and Cosumnes Community Services District held with residents this year. According to the findings, a majority of residents surveyed said more funding is needed to provide and maintain community services, while 60% of residents said they would support a potential one-cent per dollar hike.
Regular audits and community oversight of how the new revenue would be spent is also included as part of the measure.
But other Elk Grove residents like Evans and another resident who spoke that July night questioned the timing of a tax measure amid high gas and grocery prices, stubborn inflation and economic uncertainty at home and abroad.
“It affects those least able to bear it the most,” Elk Grove resident Paul Lindsay told the council. “With fluctuating inflation continuing to rise and with the nation on the brink of recession, it would be less than compassionate to even propose this action. This is not the time, not the place.”
Elk Grove had been buoyed throughout the pandemic by a heated new home market that has only recently shown signs of cooling, and continued strong performance from the Elk Grove Auto Mall. Sales tax revenues from new vehicle sales are responsible for nearly a third of Elk Grove’s general fund revenue each year. Ten of Elk Grove’s 25 top sales tax producers are Auto Mall dealerships, city budget documents show. What impact a tax hike will have on sales at the mall is unclear.
Promises of millions more dollars came with the opening of the Wilton Rancheria’s Sky River Casino earlier this month.
The tribe has agreed to invest $186 million in the city and Sacramento County over the next 20 years to boost public safety and education, roads and other services — many of the same services that a proposed tax hike will support.
It will be up to voters to decide whether to impose the increase. But Vice Mayor Darren Suen said the proposed tax hike is part of the cost of providing, maintaining and expanding the services in a growing city.
“We have to have resources to keep people safe and to respond to emergencies,” Suen said in July. “There is no good timing for taxes. It’s never a good time to pay more. The sad truth is that things continue to cost more. Our needs as a city as we grow will continue to increase and if we’re not able to keep up, we’ll be left behind.”
This story was originally published September 1, 2022 at 5:00 AM.
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