As June 5 approaches there are three new measures being introduced to voters in San Benito County. While all three measures were unanimously approved by the County Board of Supervisors, it is important to note that no arguments against the measures were submitted.
County Supervisor Anthony Botehlo said, “San Benito County needs to look for other strands of revenue.” Not wanting to put too many taxes on the ballot, Botehlo said the Board focused on taxes that would go toward the “betterment of everyone in the county” without placing a large financial impact on citizens in the county themselves.
MEASURE A
If passed by voters in San Benito County, Measure A will allow the DMV to collect a one to two dollar tax on all vehicles registered with a San Benito County address for the next ten years. All revenue from the tax collected will go to the San Benito County Abandoned Vehicle Authority and will be used solely for the removal/disposal of “any abandoned, wrecked, dismantled, or inoperative vehicles, or vehicle parts located on public or private property within San Benito County.”
Explaining why the Board chose to put this measure forward, Botehlo said that in addition to being an eyesore for the community, abandoned vehicles can be a potential safety risk for residents in San Benito County.
Questions and Answers from Your County Government
Barbara Thompson – Assistant County Counsel, San Benito County
- Is there a large problem with abandoned vehicles in San Benito County?
- I have been informed that since 1991, the AVA program resulted in the removal of approximately 6,000 abandoned vehicles in San Benito County, which would be over 200 vehicles per year.
- What constitutes as a “certain commercial vehicle” which will be charged $2?
- A commercial vehicle weighing 10,001 pounds or more. (References: Cal Veh Code § 9250.7, California Vehicle Code 9400.1.)
- If located on private property and owned by that individual would the vehicle still be removed?
- Money received pursuant to Section 9250.7 of the Vehicle Code may only be used for the abatement, removal, or disposal of any abandoned, wrecked, dismantled, or inoperative vehicle or part from public or private property when the vehicle is deemed a public nuisance.
Joe Paul Gonzalez – County Auditor-Controller, San Benito County
- How is the Abandoned Vehicle Authority currently funded?
- The General Fund is the source of funding.
- Will the tax generated from Measure A be enough to fund the Vehicle Abatement Program? How are these figures determined?
- AVA fee collections for fiscal year 2013–14 and 2014-15 totaled $50,933 and $53,877, respectively. Based on historical averages, the Auditor-Controller estimates Abandoned Vehicle Abatement fees will bring in approximately $52,000 annually in AVA fee revenue.
MEASURE B
If passed by the voters of San Benito County, Measure B will change the Transient Occupancy Tax (TOT) from 8 percent to 12 percent and will modify the definition of “operator” when applying this tax.
If passed, the new definition of “operator” would be extended to “any broker, service provider or other intermediary which the hotel has contracted to arrange for the rental of the room or that has acquired any hotel room for subsequent rental.”
A transient is defined as “Any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license, time-share arrangement or other agreement of whatever nature, for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days.”
This tax is estimated to raise $1.3 million dollars over its ten-year period, with revenue going toward county services. This means about $130,000 will be generated every year to be available for county services such as fire, library services, health services, and economic development, as well as tourism promotion.
As Botehlo pointed out, this tax will not be paid by citizens in San Benito County, but instead by visitors who rent hotel or motel rooms within the county.
Questions and Answers from Your County Government
Barbara Thompson – Assistant County Counsel, San Benito County
- Are AirBnB and camping facilities such as Thousand Trails and the Pinnacles considered a “hotel” or “online broker or service provider”?
- The ordinance would apply to hotel operators renting rooms through online brokers. However, please see Revenue and Taxation Code 7280 as to certain persons/entities who the tax may not be applied to.
- [Revenue and Taxation Code 7280 states “The legislative body of any city, county, or city and county may levy a tax on the privilege of occupying a room or rooms, or other living space, in a hotel, inn, tourist home or house, motel, or other lodging unless the occupancy is for a period of more than 30 days. The tax, when levied by the legislative body of a county, applies only to the unincorporated areas of the county.”]
- The ordinance would apply to hotel operators renting rooms through online brokers. However, please see Revenue and Taxation Code 7280 as to certain persons/entities who the tax may not be applied to.
- Where did the estimated number of $1.3 million of revenue generated by the tax over ten years come from?
- This was determined in 2014, and was in the argument in favor at that time.
Joe Paul Gonzalez – County Auditor-Controller, San Benito County
- Where did the estimated number of $1.3 million of revenue generated by the tax over ten years come from?
- I believe that Ms. Thompson used the audited FY2012-13 TOT (8%) revenues collected as the basis for that projection ($93,309).
- Ms.Thompson said this number “was determined in 2014, and was in the argument in favor at that time.” If these are the numbers being used, can the county rely on a number generated from 2014?
- Since TOT revenue is a function of the local economy these revenues vacillate [fluctuate] from year to year. I think the projection is appropriately conservative.
- If passed could this tax potentially deter visitors due to higher rates?
- I don’t believe that the local temporary housing rental market is price elastic because San Benito County is a destination location for visitors. It is my opinion that the increase in tax will not deter potential visitors.
MEASURE C
If passed Measure C will create a tax to be collected in the unincorporated area of San Benito County for all cannabis businesses based on square footage or gross receipts.
This tax will apply to both medicinal and non-medicinal cannabis business activities and will raise revenue that will go into the County’s general fund to be used for county services such as pothole repair, emergency response, and economic development. It is estimated that $3.3 to $3.9 million could be raised at the lowest proposed tax rate.
The revenue generated from this tax will be paid for solely by cannabis businesses and would be used for general government purposes at the discretion of the Board of Supervisors.
The official document on Measure C states the purpose of the tax is to “Protect the County’s budget from any additional costs of legalized marijuana and provide a source of funding for enforcement and other governmental purposes.”
The document also states the tax can only be applied if, “the County approves an ordinance allowing these activities. Measure C implements reasonable and fair taxation of cannabis business activities within the unincorporated County.”
Questions and Answers from Your County Government
Sarah Dickinson – Interim Assistant County Counsel, San Benito County
- Why does it appear that there is not a fixed figure/rate for the tax? The language says “based on square footage or gross receipts”. Is there a reason for this or an ability to clear the language before people vote?
- It depends on the type of activity. Square footage/canopy applies to cultivation. Gross receipts applies to all other activities.
- Section 5.03.159, subd. (D), “The Cannabis Business Activities Tax is levied based upon gross receipts and/or square footage of cannabis plant canopy, depending on the type of cannabis business activity in which a cannabis business is engaged.”
- If there is not a fixed figure for the tax rate is there a plan to clear this up with an ordinance put in place after? If so how and why?
- If approved, the tax rate may be established by the Board of Supervisors for each type of activity. The tax may be established within the ranges set forth in the tax measure and either on a gross receipts or square footage basis, depending on the specific activity conducted. This gives the Board of Supervisors flexibility in establishing the tax rate in San Benito County within the established parameters.
- Is there a reason the measure is not focused solely on gross revenue?
- This is a policy decision. Another method of taxing cannabis cultivation is via square footage/canopy (which is also typical within our region and amongst other jurisdictions, and is more commonly used in local taxes measures than a tax based upon gross revenues for cultivation activities.)
Joe Paul Gonzalez – County Auditor-Controller, San Benito County
- If there is not a fixed figure for the tax rate is there a plan to clear this up with an ordinance put in place after if the tax is passed? Is it common practice to approve a tax without fixed amounts?
- The taxation of Cannabis business activities in California is emerging and taxation rates should be based on what the local and regional market can bear. The regional and local experience will help determine rates after an Ordinance by the Board of Supervisors is formulated and approved for commercial purposes should one be approved.
- It says the estimated funds generated by the tax are $3.3 to $3.9 million and the estimated cost to implement this tax is between $200,000 and $350,000. If this is the case why would expenditures be funded by the “cannabis tax and other general purpose revenues”? Why aren’t all expenditures funded by the cannabis tax as found in Measure A?
- All of the upfront costs for preparation to administer the County Cannabis Program will require at least initially funding from the County’s General Fund. Should a County Cannabis Plan be established all the costs associated with administration of the Plan will be paid with Cannabis Tax proceeds. If a Cannabis Tax is successfully implemented all tax revenues are by definition a general purpose or General Fund source of revenue.
- Why is there clear penalties put in place for violations of this tax, but variability in imposing the penalties? Ex: “The County Treasurer-Tax Collector would determine whether the penalties specified by the ordinance for delinquent tax should be imposed, and whether exemptions apply or refunds are owing.”
- In every type of government tax imposition, a process or an outlet for addressing issues concerning the appropriateness of the application of the tax and penalties is established for the efficient administration of the tax. This was the process that was established in ordinance for the County of San Benito Cannabis Plan.
- SBC Vote webpage
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