City Council to consider putting sales tax increase on November ballot

The city manager called out fire service contract costs as among his fiscal concerns.

He said the current contract with Kern County Fire will draw an additional $4.2 million from the city’s general fund over the next six years because “the county has forced a non-negotiable full-cost recovery method on its nine contract cities.”

The fire contract was just one of a number of examples of federal, state and county actions Garrett said have either taken money from the city or required it to make expenditures because of unfunded mandates.

The current sales tax rate in the city is 7.25 percent, the state allowable minimum. The tax is collected on all retail sales within the city, including prepared foods and online sales.

Garrett said the city receives about 1 percent of the tax collected from retail and restaurant sales and is apportioned part of the online sales tax that goes to the county.

The city tried for a half-cent sales tax increase in 2014. That measure failed to achieve the majority vote needed, with only 46.18 percent of voters in favor (835 yes votes compared to 973 no votes).

In his staff report, Garrett said the city has worked for more than a year to “explore options to increase the city’s local control over many of these looming challenges.” City residents were asked to participate in an online feedback poll to identify their priorities for funding.

“Through phone calls, emails and online interviews, our consultant reached out to city voters to discuss potential funding options, including a one-cent sales tax increase,” Garrett said. “Those results in August of 2021 showed that 64 percent of likely November 2022 voters would support a one-cent increase to maintain local services.”

A second feasibility study at the end of June and earlier this month showed that 63 percent of likely voters support such a tax, he noted. 

The tax would generate an additional $4 million a year for the city’s general fund, Garrett said, “which would help meet the funding priorities of our residents.”

He added that data collected for the city shows that 80 percent of sales tax “is generated by those living outside the city, many of which are refueling at our service stations while traveling through the area.”

As Garrett noted, other jurisdictions have increased the sales tax rate to generate funds. The sales tax in Lancaster and Palmdale is at the state maximum — 10.25 percent. The city of Bakersfield increased its rate to 8.25 percent in 2018. And the Kern County Board of Supervisors recently decided to go to voters to increase the rate in unincorporated areas to 8.25 percent.

Other than approving consultant expenses in July 2021, the City Council has not discussed the potential sales tax measure in public. But when the council approved a balanced $33.3 million budget on June 6, council members Christina Scrivner and Susan Wiggins said they believed the city needed to start looking at how it can meet future needs.

“Whether it’s a one-cent sales tax (increase) or whatever,” Wiggins said, the city needs to look at options.

The city’s share of sales tax collected by the state is expected to amount to $4,011,000 in the coming fiscal year — about a third of General Fund revenue.

Claudia Elliott is a freelance journalist and former editor of the Tehachapi News. She lives in Tehachapi and can be reached by email: claudia@claudiaelliott.net.