The San Benito County Board of Supervisors discussed a number of funding strategies May 9, including a possible sales tax measure, in order to keep county offices running and provide uninterrupted services to residents.
Supervisor Anthony Botelho commented that the reason the topic was on the agenda was because he had attended a San Benito County Council of Governments (COG) meeting in which they discussed a special sales tax to address local road conditions. This discussion, along with the recent passage of State Bill 1 (SB1) to hike the gas tax, along with DMV fees and truck weights in order to create an influx of monies for county and city roads, made him wonder if a special sales tax was the way to go. Or, perhaps, he thought, a general tax may more appropriate to address future costs. He said the county needed to make a decision sooner than later, so he requested the agenda item so the board could weigh its options.
Louie Valdez, county analyst, explained differing amounts that might be generated through a sales tax at varying rates. For a 1 percent raise, the county would receive $2.46 million annually, while a .25 percent sales tax would produce just $30,000. He said the real question was what kind of sales tax the board wanted to support, a special tax or a general tax. The reality of passing a tax, though, he told the board, was that a general tax would require a majority vote, shared by the county and cities. He said COG could pursue a tax of up to 1 percent and a county unincorporated tax could be 2 percent. On the other hand, a special sales tax requires a two-thirds vote.
Ray Espinosa, county administrative officer, added that because the roads are in such dire straits, it might be possible to “front load” through a blending mechanism of funding, including using some county buildings as collateral to fund repairs of the roads.
Botelho said he wanted the public to know that there is a crisis in the county concerning the level of staffing, recruiting and retaining employees, and the cost of the jail construction that will result in even more cost to staff it.
“With the potential loss of PV2 (Panoche Valley Solar Project), which was going to be a revenue stream that would have helped in a lot of these areas, puts us in a crisis as far as revenues versus expenses,” he said.
(After the meeting, Botelho told BenitoLink that it looked like ConEdison will be pressured by the governor’s office to cut back the project to a fraction of the original design. He blamed the cutback on environmentalists and said, as far as he was concerned, there would be very little payout from the project for the county. He told BenitoLink that from what he knew, ConEdison had yet to unpack the millions of dollars worth of equipment already staged at the site to begin construction, and likened the situation to a circus being ready to pack up its tents and head out of town in the dead of night.)
When none of the other supervisors seemed eager to step up to the plate and make a comment, Chairman Jaime De La Cruz joked that they should open the discussion to the public in hopes of stimulating the conversation. Hollister resident Marty Richman took the challenge. He commented that people will be shocked when they see the price of gas increase due to the recent tax hike.
“There’s a double raise in the gas price,” he said. “The 12 cents a gallon is just one of the gas taxes. The other is a 3 percent increase in the excise tax on gas. It may be as much as 20 cents a gallon. It doesn’t come in all at once. I think it will be phased in to keep people from picking up their pitchforks and running up to Sacramento to kill everybody in the Legislature.”
He said the county is in for a rough time because the people who didn’t vote on the proposed local transportation tax Measure P will be looking at the newest increase from the state to supposedly pay for roads, and ask themselves why they should also pay a local tax for roads.
“The only thing that makes sense for us is a 1 percent tax in the unincorporated area to even it up with Hollister and almost with San Juan Bautista,” Richman said. “It comes down to the fairness issue of two people living side-by-side and one is paying more for his car than the other. And the other issue is it only takes 50 percent (of the vote) to pass that tax. The third issue is you can use that money for the roads if you want to, and you can use it for other things if you get in trouble. If you pass a road-only tax you can only use it for the roads.”
Steve Rosati said he was a proponent of splitting the tax, half a percent for general funding and half dedicated only to roads. He said any vote for a general fund tax comes with no guarantee that the money would be spent for roads.
“It will be tough selling 1 percent for a whole variety of things, and if people don’t believe it we’re not going to have anything,” he said. “When you look at various sources for roads, there’s the possibility of increasing the Transit Occupancy Tax (TOT). I know it failed before, but we have to think about the concerns of the public in the future with all these increases associated with SB-1.”
Rosati said he believed that because of recent storm damages to roads still in fresh in people’s minds, it might be possible to overcome their skepticism about where the money will be spent.
“Neighboring counties are in double digits and I think we’re still at 8 percent with the TOT,” he said. “Statewide, you’re looking at 12 percent. I don’t think it would be too bad to push it up 2 percent and specify it be spent for roads. I don’t think there would be a lot of opposition to that.”
Supervisor Mark Medina told Rosati that he and Botelho were on an ad hoc committee dealing with taxation and they did look at the TOT tax, along with a business license tax. While Supervisor Robert Rivas agreed that SB1 would hit most Californians hard, some funds would trickle down to San Benito County. He said there are currently 24 self-help counties in the state. If San Benito County were to become a self-help county, it would mean under SB1 that it would be eligible for additional funding for local transportation projects.
“Unfortunately, we don’t qualify, but moving forward the debate has to be shaped in such a way that the benefits can be significant for local taxpayers if we become a self-help county,” Rivas said. “That’s something we have to work hard at to accomplish.”
Supervisor Jerry Muenzer suggested that Medina and the committee he is on work with COG to come up with a recommendation for a plan to move forward with a combination of taxes and to reexamine initiatives that had been tabled in the past in order to move toward becoming a self-help county.
“As Marty mentioned, the sales tax is going to cost some, but how much are we paying toward wear and tear to our vehicles driving on those roads?” he said. “We need to remind the public of that cost.”
De La Cruz said that if the county goes with a general tax, it should work with Hollister because it needs the leverage of the city’s voters that have a tendency to vote for a general tax, whereas unincorporated voters tend to be more conservative. He said he believed that if the county became self-help that, based on population, it might receive as little as $100,000.
Botelho said he was the leading cheerleader for a special tax, but because there is no formula to figure out how much money would come to the county from SB1, it would be a hard sell to convince voters that there might be funds from the state if they would just pass a local special tax. He hoped that business licenses and marijuana taxes, truck impact fees, and even revisiting mining extraction taxes, might help.
“We can’t get enough money into our coffers to address the crisis we have with our roads,” he said. “We need to educate folks to get their support for our roads. We can’t just keep kicking this can down the road and make decisions tomorrow. We ought to make this decision today.”
De La Cruz agreed with Botelho that it would be difficult to convince the public to support a special tax and recommended that the board needed to better understand what sort of tax they would be willing to get behind.
“Maybe we need to take it to the public and if they say no maybe we should tell the residents that we don’t need that fire station,” De La Cruz said, referring to the proposed station on Fairview Road. “Maybe we should go in that direction.”
“You’re scaring me,” Botelho whispered, seemingly half-joking.
“We’re at this point where we have revenues and expenditures,” De La Cruz continued, “and every year that gap widens. I support a general sales tax.”
There was little appetite among the supervisors for recommending which type of tax to push or what percentage to go for. When Muenzer suggest that perhaps a consulting firm be hired to devise a poll to figure out what the voters might support, everyone quickly agreed to that strategy.
“If we’re serious about this, let’s hire a professional to do this for us,” De La Cruz said. “Otherwise, let’s not kid ourselves. Let’s put this on the next available agenda including funds for a consultant to help us out.”