3 sales tax increases are on Sacramento County ballots. Will inflation sink them?

Sacramento County voters this month are weighing three potential sales tax increases at the same time that they’re stretching their wallets to cope with historic inflation.

Seven in 10 Californians reported that rising prices were causing them financial hardship, according to a September survey from the nonpartisan Public Policy Institute of California. A PPIC poll released Thursday showed 39% of respondents felt they were worse off financially compared to a year ago.

That could pose a problem for the local sales tax measures with voters noticing they’re already paying more for cars, clothes, appliances and more.

“I really think that people are wanting their government to prioritize and stay within the levels of revenue that they have now,” said Betsy Mahan, president of the Sacramento County Republican Party, which recommended that voters reject the three sales tax measures. “Because that’s what all of us are having to do.”

Measure A would raise sales tax in all of Sacramento County by one-half of 1 percent for 40 years, generating about $212.5 million annually for roads and public transportation.

The concept was popular with voters in the past. An identical measure in 2016 received nearly 65% approval from voters but ultimately failed to hit the required two-thirds majority for special tax initiatives at the local level.

A 2020 appeals court ruled that special taxes placed on the ballot as “citizens initiatives” did not require a super majority and could pass with only 50.1% of the vote. Since Measure A is considered a citizen’s initiative, it would only need a simple majority to pass this year.

If Measure A passes, total sales tax in the city of Sacramento would be 9.25%.

Measure E, for the city of Elk Grove, would indefinitely raise sales tax by 1% to 8.75%. If both Measure A and Measure E pass, most purchases in the city would be taxed at 9.25%. The city says the money would fund a spate of causes, including staffing increases for the police and fire departments as well as combating homelessness and beautifying public spaces.

Measure Q would indefinitely increase sales tax by 1% to 9.25% for residents in Galt. If both Measure A and Measure Q pass, shoppers would pay 9.75% in sales tax – the highest of any municipality in Sacramento County. Revenue would largely go toward parks and recreation as well as landscaping services, but could be redirected at any time based on city council discretion.

Opponents of the measures say that now is the wrong time to burden consumers with higher taxes during a period of historic inflation and with an imminent recession.

Sales taxes are regressive and hit poorer people the hardest. Even though everyone pays the same percentage, people with less money end up paying a larger chunk of their income than wealthier taxpayers.

“It’s no secret that a lot of people are struggling,” said Bruce Lee of the Sacramento Taxpayers Association, which opposes all three measures. “One penny might not sound like much, but it adds up.”

Measure A is backed by the Committee for a Better Sacramento with support from labor and construction organizations. The measure’s proponents say the funds raised by the tax are critical to repairing the county’s aging roads and expanding bus and rail lines. Major funders include the California Alliance for Jobs, Cordova Hills Development Corp., which gave $250,000, and the Laborers Pacific Southwest Regional Organizing Coalition. Supporters did not respond to multiple calls seeking comment.

Its most vocal opponents are environmentalists more so than taxpayer watchdogs. Critics say the plan will contribute to urban sprawl and worsen air quality while not delivering equitable transit access to underserved communities.

“If we are going to have a tax in a time of unprecedented inflation, we need to make sure that that money is being spent properly, and Measure A as written is not the right way to spend it” said Nailah Pope-Harden, executive director of ClimatePlan and a leader of the Measure A, Not OK coalition.