Council members say no to sales tax increase without pension cuts
City Council members discussed a proposed increase to the sales tax of one-quarter to one-half percent on Thursday – but said the measure won’t make it to the ballot unless the city and labor unions come to some agreement about pension cuts first.
“We need to demonstrate to our constituents that we have undergone pension reform,” City Councilman Rob Fong said. “It would not be responsible of us to go out and ask for more money from our citizens, if we’re not taking care of business on the cost side from a structural standpoint.”
Councilman Kevin McCarty said he agrees with Fong.
“Voters should go to the polls saying, ‘You’ve done everything on your end, Sacramento, before you asked me for more money,’ ” McCarty said.
Former mayoral candidate and city Parks and Recreation Commission Chairman Jonathan Rewers, who proposed the tax increase in May as a way to generate a revenue and restore city services, spoke in favor of the proposal.
“I am in agreement with the staff report that a general sales tax makes the most sense for voters,” Rewers told the council Thursday.
Mayor Kevin Johnson did not comment on the topic during the council meeting, but he told the Sacramento Bee in May that he would not be inclined to support a sales tax.
Rewers told the council that one concern with a general sales tax is not knowing how the money will be used, so any discussion of a tax increase should include a general spending plan for the revenue.
But at least one person in the audience had a different take on the idea.
“These things never come to the public,” local businessman Mac Worthy said after the council meeting. “We’re never invited to those discussions.”
Worthy opposed the suggestion of creating a preliminary spending plan as unrealistic because, with a July 24 deadline to get a measure on the November ballot, the city would not have time to allow public town hall meetings to fully vet it with voters.
According to the city staff report, a quarter-cent tax increase would potentially bring the city an additional $13.5 million in revenue. A half-percent increase would bring roughly $27 million.
State law allows cities to increase their individual tax rate by up to 2 percent over the state tax base – which is currently 7.25 percent – up to a maximum of 9.25 percent.
Sacramento’s current sales tax rate is 7.75 percent. That is the rate for all cities in Sacramento County except Galt which has a sales tax rate of 8.25 percent. In nearby Placer county, the sales tax rate is 7.25 percent, and in Yolo county sales tax rates range from 7.25 to 8.0 percent.
Other tax increases on the horizon include a half-cent sales tax increase being promoted at the state level by Gov. Jerry Brown’s office and a possible increase in transportation taxes – called “Measure A” – that is being vetted at the county level.
“I think this is an interesting idea, but I just don’t want the potential outcome of a possible Measure A (transportation) tax increase being hurt in any way,” said Sacramento resident Mike Barnbaum during public comment on the item.
The Measure A tax funds local roadway and transportation projects, and can be increased with voter approval.
In a recent Sacramento Press poll asking for readers’ opinion on the proposed sales tax increase, more than 56 percent of respondents said they would not vote for it and 27 percent said they would. Another 17 percent of respondents said their vote would depend on how the tax revenue was spent.