MEETING DATE: 2/8/2022
DEPARTMENT: COUNTY ADMINISTRATION OFFICE
DEPT HEAD/DIRECTOR: Ray Espinosa
AGENDA ITEM PREPARER: Dulce Alonso
SBC DEPT FILE NUMBER: 119
SUBJECT:
COUNTY ADMINISTRATION OFFICE - R. ESPINOSA
Discussion on the potential of proceeding with a Transaction and Use Tax (TUTs) measures in the November 2022 Election and provide staff direction to include but not limited to: Amount of Transaction Tax, General or Special Tax, Term/Length, and Polling.
SBC FILE NUMBER: 119
AGENDA SECTION:
REGULAR AGENDA
BACKGROUND/SUMMARY:
While the County does well with its funding, general fund revenue growth has not kept pace with the increasing costs of providing services to a growing population and infrastructure demands of San Benito County. The County, for most positions, has had difficulties retaining employees and has the deteriorating infrastructure, including county facilities, parks, and roads. There are services that community members expect that the County does not and cannot provide.
Sales Tax
The sales tax rate in the County of San Benito is currently 8.25%. Sales tax rates can vary from jurisdiction to jurisdiction based on the voters in that jurisdiction's approval in looking through the State website. Sales tax rates in California range from 7.25% to 10.75%. In California, the state sales tax is 6%, and local governments can collect an option sales tax of up to 3.5%. There are 513 local tax jurisdictions across the state, collecting an average local tax of 2.492%,. The statewide average sales tax is 8.492%. The City of Hollister currently has a tax rate of 9.25%, and the City of San Juan Bautista is 9%.
Potential Impact on Local Sales
The actual amount of the proposed increase in the sales tax is minimal compared to the actual cost of a product sold. For example, for every $100 spent, an additional one percent sales tax increase would result in an additional $1.00 paid by the consumer. Sales tax data trends show that an increase in the sales tax rate of one percent has no noticeable effect on the number of taxable goods consumers buy. In other words, the businesses did not experience a decline in sales due to the sales tax rate in other jurisdictions where the sales tax has been increased. A one percent sales tax measure is estimated to bring in approximately $3.34 million annually to the County if passed and approved by the voters.
Sales Tax Measure Process
Regarding increases in the sales tax rate, the change must be approved by the voters to make a change to any general tax rate. The County Board of supervisors does not have the authority to raise taxes, only to bring a measure on the ballot. Place a tax measure on November 8, 2022; ballot requires board approval. The deadline to submit the measure to the elections department is August 12, 2022.
RESOLUTION OR ORDINANCE NEEDED FOR THIS ITEM:
Yes
CONTRACT NEEDED FOR THIS ITEM:
No
CONTRACT AND RFP HISTORY:
N/A
LAST CONTRACT AMOUNT OR N/A:
N/A
STATE IF THIS IS A NEW CONTRACT/ HOW MANY PAST AMENDED CONTRACTS/ OR N/A:
N/A
STRATEGIC PLAN GOALS:
BUDGETED:
No
Budget Adjustment Needed: No
Unfunded Mandate (Is this a mandate not funded by the State): N/A