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Business groups often don’t like new taxes. Why does this one back mayor’s tax hike?

Steinberg on sales tax increase: ‘One penny could change the economic arc of Sacramento’

Sacramento Mayor Darrell Steinberg speaks on Thursday, June 7, 2018. about a proposal to raise city's sales tax one cent.
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Sacramento Mayor Darrell Steinberg speaks on Thursday, June 7, 2018. about a proposal to raise city's sales tax one cent.

In a major political boost for Mayor Darrell Steinberg’s November measure to increase the city sales tax, the influential Sacramento Metropolitan Chamber of Commerce announced Thursday it has endorsed the proposal.

The Metro Chamber said the sales tax would fund “essential city services, including police, fire, parks and (provide) an additional investment for inclusive economic development.”

Metro Chamber CEO and President Amanda Blackwood said “with the challenges our city has, we cannot get into a position where we lose police off our streets or fire services or any other essential services.” She said the business group is also supportive of Steinberg’s plan to use millions of dollars from the tax to support economic development in disadvantaged neighborhoods and to fund homeless services and affordable housing construction.

“There is an opportunity to make an investment in economic development that we agree is important,” she said. “There are repercussions to not having an inclusive economy.”

The City Council voted 7-1 last week to place the sales tax measure on the ballot. The plan would make permanent a half-cent sales tax increase approved by voters in 2012 and add another half cent. The Metro Chamber is the first major local organization to formally endorse the measure.

Steinberg said the endorsement is “a clear signal to voters that Sacramento has a unique moment in time to define its economic future.”

“Their endorsement is a first and major step towards building a diverse and deep coalition in support of the city’s game-changing measure,” the mayor said.

If approved, the measure would raise the city’s sales tax rate to 8.75 percent, tied for the highest rate in the region with Isleton.

The Metro Chamber and some other business groups expressed concern when Measure U was first on the ballot in 2012, arguing it would push consumers to shop outside city limits. The chamber advocated for a quarter-cent increase instead of the half-cent boost that appeared on the ballot.

Blackwood said the chamber’s support this time hinged partly on assurances from the mayor that oversight would be provided over how the tax dollars are spent. The city has a citizens’ oversight committee that reviews an annual audit of the Measure U tax spending and reports to the City Council how the proceeds are being spent.

“We agree with the concept (of the tax increase),” Blackwood said. “We want to be sure it is going to be used in the ways it says it will be.”

Steinberg said “we fully embrace their call for strong outcome-based accountability measures for the expenditure of these new public resources.”

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