Buying anything in Turlock? Here’s what you need to know about the sales tax increase
If Turlock shoppers notice a higher total on their receipts starting Thursday, a three-quarter-cent sales tax increase is the cause.
Businesses in Turlock are set to begin collecting the Measure A sales tax on April 1, five months after residents passed it with 56.7% of the vote.
The city sales tax rate will rise from 7.875% to 8.625%, generating about $11 million per year until voters repeal or amend it in another election. The revenue will go toward the city’s general fund, which Measure A supporters said needed additional income streams in order to maintain services. In the past two fiscal years, the City Council froze a total of 35 city jobs, including a dozen police and eight fire department positions.
Previous councils before the 2018 election spent down the city’s general fund reserves, The Bee previously reported. This past June, the city estimated its general fund reserves to be $10.7 million. At the time, the council passed a $42 million general fund budget for the 2020-21 fiscal year.
The council will determine how to spend Measure A general sales tax revenue locally, per the ordinance. Purposes listed in the ordinance include maintaining and restoring police and fire services, repairing roads, responding to homelessness, supporting local businesses and ensuring Turlock’s long-term financial stability.
Here are answers to some frequently asked questions about the sales tax.
How will Turlock spend the tax revenue?
The majority of the council indicated interest in sticking to the issues listed in the ordinance and assigning spending percentages. During a meeting March 9, members named roads, police and fire, and increasing general fund reserves as priorities. The details will be determined in upcoming budget workshops, however.
In her comments to city staff on March 9, City Council Member Pam Franco said she wants to put as much as 10% of the annual Measure A revenue toward the general fund reserves. Once the city reaches about $15 million in the reserves, Franco said she would be interested in adjusting an allocation.
“I believe that we need to save for the rainy day that we know is going to come sometime and we sure don’t want to get caught without adequate reserves,” Franco said at the time. “Then we would assign a percentage to each one of the other items that were promised — roads, public safety — and that percentage would be determined as necessary.”
The council will likely approve the 2021-22 budget with Measure A spending decisions in June, before the next fiscal year starts in July.
When will the city begin receiving Measure A funds?
The city anticipates receiving its first revenues from the tax on July 1, staff have said previously. An agreement with the California Department of Tax and Fee Administration the council approved in December details the process. While Turlock shoppers will start paying the higher sales tax in April, this is a normal delay for when cities actually receive sales tax revenue.
In February, the finance department estimated the new tax will generate $2.7 million for this current fiscal year. The projection may be higher or lower than the actual revenue the city receives in the summer.
As of the mid-year budget review on Feb. 9, Turlock is projecting a net general fund balance increase of $3.2 million this fiscal year.
What are the oversight measures for the tax?
The sales tax ordinance requires the city form a citizens oversight committee to review Measure A spending. The five-member advisory committee is tasked with determining if the city follows the purposes outlined in the ordinance, producing an annual report on their findings and meeting quarterly each fiscal year.
While the committee will advise the City Council, it would not set funding priorities, financing plans or project plans, according to the ordinance. The committee’s meetings will be open to the public and members may schedule additional meetings as needed. The annual report it shares with the public will also be subject to the council’s review and approval, per the ordinance.
Current city employees, officials, contractors and vendors may not serve on the committee made up of Turlock residents. The ordinance also requires that the council try to appoint at least two certified public accountants or people with significant experience in a financial field.
Turlock residents interested in reviewing Measure A sales tax spending can apply for the Citizens’ Oversight Committee through March 31. Applications are available on the city website.
