Tuesday, Nov. 13, 2007 • City Council discusses possible sales tax increase

Publisher’s note: This story originally appeared in the Tuesday, Nov. 13, 2007,  edition of the Lassen County Times.

The Susanville City Council directed Interim City Administrator Rob Hill to come up with a proposed ballot measure for a 1/2 percent increase to the sales tax within the city limits.

The increase’s primary function, according to Mayor Lino Callegari, would be to provide funding for both a community swimming pool and to supplement the budget of the city police and fire departments.

The sales tax was originally brought before the board as a way of bringing increased income to the city’s general fund.

In his initial report to the board on the tax increase, Hill and Finance Director Robert Porfiri explained the general fund’s unrestricted cash and fund balance has slowly increased over the past few years. The main reason the fund has increased is due to reduced staffing, unfunded capital improvement projects and depreciation programs.

Porfiri made the argument these are only short-term solutions to keeping the overall city budget balanced, saying if a new source of income wasn’t found soon, it could lead to a financial crisis in the near future.

In his agenda item report, Hill explained, “The city is struggling to provide historic levels of service through all departments. Expenses have continued to increase at a rate much higher than revenues. Consequently, the city budget has been balanced the last four years primarily by cutting staff.”

For the city budget to remain balanced in the future, Hill said, the city will either have to start cutting services and more programs or find new sources of income.

Hill said one of those sources of income could come in the form of either a sales or parcel tax, to be placed on the city ballot for the next election on June 30. While the parcel tax would only affect people in the city who own property, the sales tax would affect everyone making a purchase in town.

Hill and Porfiri focused more on the sales tax increase, not only because it could bring in more revenue, but also because it was more evenly distributed among the citizens of the county, as well as anyone passing through.

Hill brought up in his report that Susanville residents are already paying less in sales tax than most residents in California and Northern Nevada.

A 1/2 percent increase would bring the current sales tax on every purchase up from 7.25 percent to 7.75 percent. This would equate to roughly $864,000 more to the city annually. For the tax measure to pass, the voters would have to pass a two-thirds majority vote.

Callegari said the city would have an easier time selling the tax initiative to the community if the money was going to be dedicated to something the community specifically called for, such as the swimming pool. He said if the police and fire departments were included in the measure, then they could get back to regular staffing levels as well.

“The people are going to want something tangible in their hands,” Callegari said. “And right now, it’s the swimming pool.”

Upon discussing the measure with the rest of the council, Callegari directed Hill and the rest of the city staff to come back at the next meeting with a preliminary plan on how to carry out the swimming pool/safety services sales.