The City of Hollister needs more money – what’s new about that? This time the major item on the agenda is road maintenance; it will cost about $4 million a year just to keep the city’s roads in their current condition plus a little bit of year-over-year improvement. We don’t have those funds, we’re going to be short about half that total when Senate Bill (SB) 1 is operating fully. Right now, we have about 25 percent of what we need.
Hollister may get a little road funding help from time to time, but the state and federal government won’t let the city just print money; therefore, the city looks to taxes to generate the required revenue, but all taxes are not created equal.
It’s true that the state has just approved SB1, a massive transportation tax bill to provide some local funds, but it is also true that Hollister is going to get the very short end of that stick and that is why I opposed it. As I previously wrote, the state is skimming 62 cents of every dollar just to start. Then, locally, about $3.5 million a year, three-quarters of what is left of our share, goes to San Benito County; only $1.2 million goes to Hollister, which has more than 60 percent of the population that generated those tax dollars. The gasoline, diesel and registration cost increases are going to hit our commuting population and transportation costs of ag products hard. Additionally, Hollister voters recently and generously extended the local transaction 1 percent sales tax for 20 years. Another sales tax increase in Hollister should not be on the table.
Now is not time to get greedy and try to raise the sales tax again by having COG front the tax increase countywide or to cover for the gun-shy county government by having Hollister voters drag the unwilling unincorporated voters along. After all, the county is the big local winner on SB1. It’s high time for the unincorporated area of the county to step up and do their fair share as did the Hollister and San Juan Bautista residents.
That being said there are two taxes the city should raise that will have little or no impact on current residents. The first would be the TOT (Transient Occupancy Tax) sometimes called the hotel or “welcome stranger” tax; these are usually paid by short-term visitors. Both SBC and Hollister have 8 percent TOT rates, these should be raised to 12 percent and changed to a split tax similar to the way it works in San Jose. Ten percent for general TOT with 2 percent reserved to improve tourist-related business.
In FY 2015 Hollister collected $178,479 on TOT, using that base the revised tax would provide $223,098, an added $44,619 for the General Fund and the same amount for tourism. The county won’t get much because they have very low hotel use.
A tax revenue analysis shows that Hollister is severely underperforming both Morgan Hill and Gilroy in Construction Development Taxes Functional Revenues. In 2015, Morgan Hill generated $6.1 million ($140 per capita) and Gilroy generated $8.90 million ($161 per capita) and Hollister only $1.02 million ($28 per capita) in that category. We need to analyze and concentrate on increasing that category to mitigate the impact of development on the roadways.
Those two taxes will have a low impact on the majority of our hard-pressed residents and provide some extra funding for infrastructure and maintenance such as road repair.