Modesto council to look at tax ideas

kcarlson@modbee.comJune 24, 2013 

  • ABOUT THE REPORTER
    alternate textKen Carlson
    Title: Staff writer
    Coverage areas: County government, health and medicine, air quality, the environment and public pension systems
    Bio: Ken Carlson has worked 13 years for The Bee, covering local government agencies in Stanislaus and San Joaquin counties. His in-depth reporting has focused on access to health care and public employee pensions.
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    E-mail: kcarlson@modbee.com

— A proposed 1 percent sales tax increase would help Modesto maintain its level of services and could be used to combat gangs, put more officers on patrol, take better care of parks and repair roads more quickly, a city report says.

In addition, the tax increase — requiring majority voter approval if put on the ballot in November — would generate funding to repair the fire station on 11th Street and replace older engines.

Mayor Garrad Marsh's proposal goes to the City Council tonight, although there is no assurance a majority of council members will vote to put the tax measure on the Nov. 5 ballot.

A second option is a half-percent safety tax that would augment funding only for police and fire service. According to a staff report, the funding couldn't be spent for other purposes and the city would need to make serious cuts to departments other than public safety in the 2014-15 budget year.

In the past year, Marsh has talked of putting 100 additional officers on the streets in a city where shootings and homicides have become far too common. Now, part of the rationale for a tax increase is to maintain the level of services while making an effort to beef up the police force.

A two-page report for tonight's council meeting does not show how many officers would be hired with the 1 percent general purpose tax or a half-percent tax. The first proposal would give the city an estimated $26 million annually to use at the council's discretion; the half-percent special-purpose tax would require two-thirds approval and generate an estimated $13 million a year.

The general-purpose levy would raise Modesto's sales tax from 7.625 percent to 8.625 percent, adding 20 cents to a $20 purchase. The safety tax would require consumers to pay 8.125 percent on purchases in Modesto.

Threat of serious cuts looms

City leaders used $10 million in one-time fixes and $2 million in spending cuts to close a general fund budget deficit for the fiscal year that starts in July. About 70 percent of the general fund pays for public safety; it's fed by revenue from property and sales taxes, business license fees and other sources.

According to top officials, the city will need additional revenue or have to make serious cuts to balance the general fund in the 2014-15 fiscal year, because of rising costs for operations and employee retirement benefits.

Councilwoman Stephanie Burnside wants to further explore spending reductions and is not convinced a tax increase is necessary. The Modesto Chamber of Commerce and others contend that a sales tax hike in Modesto would undercut chances of passing a countywide transportation tax.

Business leaders argue that a better road system would encourage economic development and create more revenue to solve the city's budget woes in the long run.

If the council wants to move toward either of the tax increases, City Manager Greg Nyhoff and City Attorney Susana Alcala Wood would draw up language and prepare other documents for a July 9 public hearing.

The city attorney would need to prepare an impartial analysis for the measure. The city would file written arguments for and against the ballot measure, which would appear in voter pamphlets.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.


COUNCIL WATCH

The Modesto City Council will meet at 5:30 p.m. today in the basement chamber of Tenth Street Place, 1010 10th St. The council will consider the following items:

• A presentation from homeless advocate Vernon Price

• Appointment of a delegate to the League of California Cities annual conference in Sacramento, set for Sept. 18-20

• Plans to renovate the tennis courts at Modesto High School and award a $160,000 contract to Central Valley Asphalt of Lindsay

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