Citing a need for supplemental revenue, the Paso Robles City Council is considering a sales-tax increase, an initiative that could go before voters in November.
On July 19, the council asked city staffers to develop different options for how they might allocate extra revenues from a tax hike. The issue is scheduled to come back before councilmembers in the coming weeks.
Paso Robles currently receives a 1-percent general use sales tax, which translates to approximately $6.3 million each year, according to a city staff report. The money is used to partially fund the city’s general services and facilities costs.
The council is considering an increase ranging from an additional quarter of a percent to 1 percent, in possible increased increments of quarters of percents. Projected annual revenue from the increase ranges from about $1.6 million to $6.3 million.
California allows cities to impose additional taxes of up to 1 percent. In order for a city to impose such an increase, voters would have to approve it in a citywide election.
City services—such as law enforcement, fire services, and recreation—are paid from taxes collected by the city. According to the staff report, the city of Paso Robles, like most other cities in San Luis Obispo County, has been drastically affected by the economic downturn. The report also states that even though the city has reduced its operational costs by roughly $7 million annually, demand for services is outpacing revenues.
City officials are considering a tax increase this year to provide more funds for road repairs. The city needs about $82 million up front and approximately $3.5 million each year to improve and maintain its roads. The city expects it will also need an additional $1 million per year to pay for disabled access needs.