Desperate to eliminate Hollister’s $3 million budget deficit,
City Council members say that they will likely vote to put a sales
tax increase on the ballot for the November election after a recent
survey found that a majority of local voters would support it.
Hollister – Desperate to eliminate Hollister’s $3 million budget deficit, City Council members say that they will likely vote to put a sales tax increase on the ballot for the November election after a recent survey found that a majority of local voters would support it.
A survey, conducted last month by California firm Fairbank, Maslin, Maullin & Associates, Inc., found that 55 percent of voters in Hollister would likely approve a 1 cent increase to the city’s 7.25 percent sales tax, with 42 percent saying that they wouldn’t. Council members say that a sales tax increase is about the only quick way to shore Hollister’s budget – which has an ongoing $3 million deficit that will drain city reserve funds within three years.
“I don’t think we really have an option,” Councilwoman Monica Johnson said. “We have to do something to maintain (the city).”
Johnson is not alone in her belief that an increase to Hollister’s sales tax – one of the lowest in the region – is what the city needs to regain its financial footing. Council members Doug Emerson Brad Pike, Robert Scattini and Pauline Valdivia all said that, given the city’s deficit and the survey results showing support, they will likely vote to put the increase on the November ballot.
“We have no other choice but to do that,” Scattini said.
The tax increase scenario used in the survey was a 1 cent general sales tax increase, which would go into the city’s general fund. If on the ballot for the Nov. 7 election, the proposed tax increase would need just a simple majority of more than 50 percent of votes to pass, rather than two-thirds approval that would be required for a tax increase that would be dedicated to a specific city service.
City Manager Clint Quilter estimated that, if passed, a 1 cent sales tax increase would generate about $4 million in additional revenue for the city each year. The added income, he said, would allow the city to improve services, such as public safety and road repair, that have diminished over the past few years as the city has cut its work force by some 20 percent.
Suffering under a sewer moratorium – which prohibits new construction requiring sewer hook-ups – imposed by the state in 2002 after 15 million gallons of treated sewage spilled into the San Benito River, Hollister’s economic development has been brought to a near standstill.
While Quilter says the city will have a new sewage treatment plant by early 2008, thus lifting the moratorium, and city officials are working on a strategy to market Hollister to businesses seeking new locations, there are few options, aside from a tax increase, to boost the city’s bottom line and stave off cuts to city services, he said.
Without a sales tax increase, Quilter said, the city will have to cut services by another 20 percent in coming years. Though he said that no specific services have been targeted yet, Quilter said that services such as public safety, parks and recreation and street maintenance are all at risk.
While the survey found that there is support for a sales tax increase in Hollister, not everybody is convinced that a tax increase is a good route to financial solvency.
Hollister resident Marvin Jones said that a higher sales tax will make Hollister unattractive to businesses that might have otherwise moved to the city, bringing jobs. Also, he said, Hollister residents will end up paying hundreds of dollars more every year – an added expense that some can’t afford. The solution, according to Jones, is making further cuts to city services.
“They haven’t made all the cuts they can. They made the easy cuts,” he said. “I do not envy them at all, that’s the tough part of the job.”
Pat McFarland, who co–owns the Fireplace Depot in downtown Hollister, said that she isn’t necessarily opposed to a sales tax increase, but would want to see evidence that it was being used to improve the city.
“The issue is not the amount of money. The issue is where it’s going,” she said. “No one ever sees the result of tax increases, except in their pocket book. The knee–jerk reaction is to just say ‘no.'”
McFarland did say that if a tax increased is passed, whether she ends up agreeing with it or not, it will not affect how people shop in Hollister because most surrounding cities have higher sales tax rates.
Luke Roney covers local government and the environment for the Free Lance. Reach him at 831–637–5566 ext. 335 or at lr****@fr***********.com.
