Raising taxes is one option on the table as the Hollister City
Council looks for ways to eliminate its $3 million budget
deficit.
Hollister – Raising taxes is one option on the table as the Hollister City Council looks for ways to eliminate its $3 million budget deficit.
Property, sales and hotel taxes are among the options the council’s revenue subcommittee will be looking at in the coming weeks as they ponder ways to bolster the city’s bottom line, according to City Manager Clint Quilter.
Quilter added that the subcommittee will explore a variety of revenue boosters in addition to tax increases. But according to council members, although increasing taxes is a last resort, there are few other short-term fixes available.
Councilman Doug Emerson said that, short of a sales tax increase – which would require approval of a majority of voters – he didn’t have any ideas for increasing revenue in the short term to close the gap.
“Short term, it’s really hard,” he said. “There really isn’t any good short-term ways to boost revenue.”
Emerson said that if any tax increase could be sold to voters, it would likely be the sales tax. At 7.25 percent, Hollister’s sales tax is among the lowest in the state.
“I’m not eager to raise taxes, but we do know we have about the lowest sales tax in the state,” he said. “That’s an argument for raising it.”
Councilman Brad Pike, who sits on the revenue subcommittee, also thought that if the city was going to pursue a tax increase, voters might be more receptive to an increase in the sales tax. Since so many Hollister residents shop in Gilroy, with a sales tax one percent higher than Hollister’s, they are used to paying the higher tax rate, he said.
Many on the council would prefer to focus their energy on finding ways to attract new businesses to the city – a problematic solution as long as the sewer moratorium is in effect.
“I’m focusing on business, getting new businesses in the industrial park and revitalizing downtown,” Pike said.
Pike did say, however, that he might support some sort of tax increase if it was dedicated to the city’s public safety.
“The only tax I’d be interested in is a public safety tax. It’s not just general, it goes to a specific need where we are deficient,” he said. “Just having a general tax, just to try to make a surplus, is not a very popular thing.”
If the city tried to pass a tax increase that was to be dedicated to a certain area, state law requires that two-thirds of voters approve it.
Emerson agreed with Pike and said he is more interested in developing Hollister for the long-term, rather than turning to a tax increase.
“I’d like to exhaust all other avenues first,” he said, adding that the city would do better to attract businesses to create jobs and increased tax revenue.
Councilman Robert Scattini said that, even though increasing taxes may be necessary in the short term, he didn’t think voters would approve any tax increase.
“I personally don’t feel that the people of San Benito County are going to pass anymore taxes. I just don’t think its going to pass,” he said. “They can put money into trying to sell it, but I don’t see doing that when it’s all for naught.”
The best thing the city can do, Scattini said, is build a new sewer treatment plant to get the state-imposed building moratorium lifted and then start attracting new businesses to Hollister.
Both of those things are happening. City Manager Clint Quilter has told the council that a new sewer treatment plant will be complete by the end of 2007. And the city is recruiting a person to market the city to businesses looking for a new home.
Luke Roney covers local politics and the environment for the Free Lance. Reach him at 831-637-5566 ext. 335 or at lr****@fr***********.com
