Low return on taxable transactions in county

Because San Benito County receives only a small portion of
funding back from the state from its taxable transactions, it
leaves cities like Hollister and San Juan Bautista with limited
revenue sources.
Taxable sales in Hollister during the fourth quarter of 2001
totaled more than $80 million, but Hollister received only $3.5
million back, officials said.
Because San Benito County receives only a small portion of funding back from the state from its taxable transactions, it leaves cities like Hollister and San Juan Bautista with limited revenue sources.

Taxable sales in Hollister during the fourth quarter of 2001 totaled more than $80 million, but Hollister received only $3.5 million back, officials said.

When reviewing the city’s return to other cities of comparable population, City Manager George Lewis said Hollister was below the state average per capita.

“Our sales tax at $3.5 million is only 23 percent of what we need to operate,” he said. “The total income to operate the city’s services, our fire, police, recreation, parks and the planning department, is about $15 million. We operate very lean.”

As does the City of San Juan Bautista.

Last year’s total sales for the Mission City was almost $3 million, but SJB received about $300,000 from its taxable transactions.

And like Hollister, the city does not rely solely on its sales tax revenues to operate city business.

“We have continual cash flow,” City Manager Larry Cain said. “We are in better shape now than we were three years ago, but we still have to watch our cash flow.”

Money for capital improvement projects is being put away in a LAIF fund.

“We are trying hard not to touch it,” Cain said.

Comparing the numbers to previous years, Cain said San Juan has maintained its financial situation, which he attributed to new restaurants and businesses that have opened.

“They opened up at a time we anticipated our sales to go down,” he said.

The general fund is made up of a combination of sales tax reimbursements and property taxes, which is considered insignificant because when it comes to secured property, Hollister’s Finance Director Barbara Mulholland said the city does not even see a return of $1 million back.

“One million dollars barely supports one-quarter of the amount of money it takes to run the police department,” she said, adding that Hollister’s future sales tax revenue will be seriously vulnerable once Cosco opens in Gilroy.

“I’m very disappointed about Cosco,” she said. “It will be a big drain on sales tax revenue, here. We have to convince people if they shop out of the area that we are vulnerable to having our share cut. All the money will go to Gilroy.”

Mulholland said the city of Hollister will have to do more commercial development to target the age range of its current population.

“We will have to do research to see if we can bring in Gotchalks or an Old Navy to generate retail sales,” she said.

But the biggest money maker the city has going is the annual motorcycle rally.

“It does bump up are sales tax,” Mulholland said. “It may not be a popular thing to say, but it is the truth.”

In addition to sales and property taxes, revenues are collected through cable franchise fees, rental fees, utility fees paid by Pacific Gas and Electric, water and sewer fees, and the motor vehicle tax.

“What people purchase in Hollister is more the everyday items they need,” she said.

Taxable Sales in San Benito County

Transactions

Cities – $83,823,000

Unincorporated areas – $29,410,000

Total – $127,403,000

Hollister

Retail stores – $67,268,000

All outlets – $80,863,000

San Juan Bautista

Retail stores – $2,713,000

All outlets – $2,960,000

San Benito County

Retail stores – $76,912,000

All outlets – $127,403,000

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