San Benito County officials are exploring their options to put a 1% local sales tax on an upcoming election ballot to raise revenue for services, upgrades, new facilities and other projects.
Such a tax could generate up to $3.3 million in additional revenue for the county’s general fund in the first year of implementation, according to a report presented to the board of supervisors at the July 29 meeting.
If the tax is approved, the county could begin borrowing money from a variety of sources to begin new construction projects—such as road repairs or a new library—and pay it back with future sales tax revenues, according to county officials.
“There is a need for more roads and services,” Supervisor Kollin Kosmicki said at the July 29 meeting. “The public cares about these things so we’ll put it up to them. It probably should have been done years ago, and now would be the right time.”
Kosmicki and Supervisor Bob Tiffany, working as an ad hoc committee, proposed the idea of a sales tax ballot measure to the full board for consideration. Following a report by the consultant KNN Public Finance at the July 29 meeting, all three supervisors present agreed to direct county staff to begin the process of drafting a measure that could be submitted to elections officials.
Supervisor Peter Hernandez was absent from the meeting.
The earliest election where the sales tax measure might appear—following further public hearings and board approvals—would be the June 2022 primary election. But a county staff report suggests the measure would more likely be submitted for the November 2022 primary election.
In the months ahead, county staff will draft a proposal and seek more direction from the board, and hold a number of public hearings on the sales tax measure. Officials have not decided if they will hire a polling firm to gauge the public’s support before approving a ballot measure.
Officials have some options for the type of sales tax to place on the ballot. One is a general tax that funds any local services financed by the county’s general fund, requiring a simple majority vote. Another is a “special tax” dedicated to a specific purpose or set of projects, which requires a two-thirds majority to pass.
The supervisors will also have to decide if they want to put the sales tax measure to voters throughout the county—including those in Hollister and San Juan Bautista—or only to voters in the unincorporated areas.
The tax would be levied only in the unincorporated areas of the county, according to a count staff report.
Shoppers in Hollister are already paying the state maximum 9.25% sales tax, which includes an existing countywide 1% Measure G tax for transportation and a local three-quarter-cent tax, according to the presentation by David Leifer of KNN. San Juan Bautista’s current sales tax rate is 9%.
The supervisors commented July 29 that they would prefer to put the upcoming sales tax measure to all the voters in San Benito County, including those in the incorporated cities.
“I can get behind this (ballot measure) as long as everybody has the opportunity to have their say,” Board Chair Bea Gonzales said.
The state minimum baseline sales tax rate is 7%, which includes a built-in 1.25% “uniform local sales tax,” according to Leifer. Cities, counties, special districts and other jurisdictions can add up to another 2% in sales tax for local purposes, but the maximum cannot exceed 9.25% by state law.
San Benito County’s current total sales tax rate is 8.25%. That includes the Measure G sales tax, which was approved in the November 2018 election.
The county’s general fund currently receives about $3.2 million in sales tax revenue annually from its 1% allocation from the 7.25% levied by the state, according to county staff.