Faced with funding shortfalls for city services like road repairs and public safety infrastructure, the Paso Robles City Council voted on July 18 to place a half percent sales tax increase on the November ballot.
If approved by a simple majority of voters, Paso would become the first city in SLO County to hike its sales tax above 7.75 percent—to 8.25 percent. The measure would raise an estimated $4.7 million annually for the city, with 40 percent of it generated by tourists. The measure would expire after six years.
Each city in the county already has a half percent sales tax in effect; Paso voters approved theirs in 2012. But city officials say more revenue is necessary to keep up with the maintenance of degrading local roads and infrastructure needs, like building a third fire station to serve the northeast end of the city.
"Our infrastructure is underfunded," City Manager Tom Frutchey told council members on July 18.
According to Frutchey, earlier this year, the City Council set aside $3 million for depreciating facilities "for the first time."
"We should've been putting aside $3 million every year for the past 40 years for those facilities," Frutchey said.
Many residents who spoke at the City Council meeting opposed the tax proposal, and several felt that it was designed to pay off employee pension debt, of which Paso has about $40 million in liability.
"The 800-pound gorilla in this room is CalPERS [California Public Employee Retirement System] and the unfunded money that Paso owes to CalPERS. ... We still have a big, big multi-million dollar obligation," resident John Reynolds said at the meeting.
A majority of the City Council felt that submitting the proposal to local voters was the right move.
"We're not unique, but we still have to deal with it. So what do we do?" Councilmember John Hamon said. "It's either [a tax increase] or go bankrupt or we start degrading services. We're kind of stuck at this point. To me, we need to give the public an opportunity to say what they want to do."
The City Council initially considered a 1 percent sales tax increase, but council members decided that was too big an ask.
"I think the more consistently and the longer period of time we show we can handle these monies responsibly and transparently, the more confidence we're going to have in the electorate in the future," Mayor Steve Martin said.
If approved, a citizens oversight committee would look after the funds generated by the tax measure, with the revenues prioritized for roads and emergency services. Δ