Increase in sales tax to go before Modesto voters in November. Where money would go
The Modesto City Council voted unanimously Tuesday to put a 1% sales tax on the November ballot.
If approved by voters, the city says the tax would bring in $39 million annually for such general government purposes as reducing homelessness, faster 911 response times, neighborhood police patrols, traffic enforcement, fire protection, maintaining city trees and sidewalks, and keeping parks and other public spaces safe and clean.
The city could spend the tax for any of the services it provides. But the ordinance for the tax calls for the City Council to establish a nine-member community oversight board to review how the tax is spent and to make public reports to the council. The committee also would hold public meetings.
Modesto is seeking a general sales tax, which requires 50% of the vote plus one to pass. If approved, the tax has no end date. It would take another vote to do that.
The city hired a polling firm this year to gauge support for a potential sales tax. A random sample conducted in late March of 1,117 registered voters likely to vote in the November election showed an initial 65% support for a 1% sales tax.
Support dropped to 60% after voters heard arguments against the tax, including that residents already pay too much in taxes, now is not the time to raise taxes as they cope with the pandemic and inflation, and there are no guarantees how the city will spend the money.
While the council voted 6-0 to put the tax on the ballot, Councilman Tony Madrigal raised concerns about the potential for low voter turnout and that not boding well for the tax and that Modesto City Schools will have a $198 million bond measure on the same ballot.
Councilman David Wright said the tax is an opportunity for the city to fully realize its potential and entice more people to come here and enjoy the city’s attractions.
The sales tax would go into the city’s general fund, which makes up about a third of the city’s $508 million operating budget. About 80% of the fund is spent on public safety.
City officials have said Modesto has grappled with an ongoing structural deficit to its general fund for many years because while its revenues are growing, they are not growing as fast as its expenses, primarily employee costs, including pensions.
Officials also say Modesto has a lower sales tax rate than many cities of similar size (the city’s tax rate is 7.875%), a less robust local economy, and suffers from a state formula that does not provide it with adequate property tax revenue.
Officials say they have balanced the general fund by such measures as eliminating or freezing vacant positions, not fully funding other city funds and using those “savings” to help balance the general fund, delaying maintenance, and using one-time money to fill budget holes.
They say after years of reductions, the city cannot provide the level of services that residents expect and deserve and without additional funding the city faces further cuts in future years, with the brunt in public safety.
This story was originally published June 29, 2022 at 12:00 AM.
