Some business owners in San Juan Bautista are worried that a
three-fourth cent sales tax increase on the November ballot could
scare off tourists or burden local pocket books.
Some business owners in San Juan Bautista are worried that a three-fourth cent sales tax increase on the November ballot could scare off tourists or burden local pocket books.
City officials, however, say the money is needed to solidify the town’s budget, and that the tax has the support of many in the business community. The San Juan Bautista City Council voted to place a tax on the ballot last week.
Galeria Tonantzin business owner and Chamber of Commerce member Janet Martinez strongly opposes raising the city’s sales tax because she believes it could hurt business.
“That’s ridiculous. It’s high enough,” she said. “I think we need to find another way to (get revenue)… We’re not going to get more business by gouging tourists.”
Martinez suggested working on ways to entice more large tours into coming to San Juan instead of raising taxes.
“They’re not going to want to pay three-fourths more when in the next town over they don’t have to,” she said. “I’m going to vote no.”
The tax increase would bump the current 7.25 percent to an even 8 percent for all retail businesses and would generate an additional $120,000 a year into the city’s general fund, said City Manger Larry Cain.
“It would let us maintain our levels of service if the state takes any more money from us,” he said. “The Council put it on the ballot because we realized we need to keep the general fund solid.”
None of the council members returned phone calls Friday.
The tax must gain 50 percent of voter approval to pass. Cain believes that threshold can be met because a similar tax on the March ballot, which needed two-thirds approval, barely lost with 62 percent of voters voting yes, he said.
“The tax is supported by the Chamber of Commerce, businesses and people in town who generally know we do need to have more money in the general fund,” he said.
Chamber of Commerce Executive Director Halina Kleinsmith declined comment on the chamber’s stance without direction from the board of directors.
But Guatemala Exclusive owner and chamber member Claudia Lopez also denounced the tax increase in defense of the local residents.
“This is a small town and a lot of locals do not need to be affected with a high tax rate,” Lopez said. “Yeah, the tourists will be affected and they probably won’t even know the difference, but the locals are the ones who will be directly affected.”
Precious Petals owner Kim Sandles is uncertain how much a tax increase could affect her business, but doesn’t think she needs to be concerned.
“I know they have things to pay for, but that’s kind of a big jump,” she said. “I don’t think it’s gonna pass.”
While San Juan is working on boosting revenue with the tax, unlike the county and state it is located in, the budget is right on track and the city won’t lose any services in the coming fiscal year, Cain said.
Having fewer expenditures and being extremely conservative with its spending has helped the city avoid a deficit such as the one Hollister is suffering through, he said.
“We’re real small and it’s easier for us to do what we do with less people,” he said. “But Hollister has their problems and we have our problems – we have far more chickens than they do.”
The city hasn’t started working on its 2004-2005 fiscal year budget, although the new year begins July 1, because the council passed a budget extension that gives it until August to put one together, Cain said.
“We’re trying to figure out what the state’s going to do,” he said. “There’s changes happening on a daily basis.”
Next year’s budget should be fairly similar to this year’s budget of approximately $1.6 million, but the city will incorporate a new section of its budget for a capital improvement program to repair the city’s dilapidated water system, he said.
“The resources for the project are to improve the drinking water quality, quantity and storage,” Cain said. “I haven’t found any wooden pipes but people tell me they’re there. The major distribution portion will be rebuilt and upgraded.”
The city is in line to receive $3.8 million from the federal government, along with an already approved $3.1 million from the San Benito County Water District to pay for the year and a half to two year-long reconstruction, Cain said.
The city already has spent approximately $800,000 on the project out of this year’s budget and needs to pay for $200,000 more. The city is hoping to get part of that money from the state and borrow the rest, Cain said.
“I’m working on sources right now,” he said. “I don’t know how much yet – there’s a lot to be determined while we are still putting together the budget.”
Erin Musgrave can be reached at 637-5566, ext. 336 or at
