Pushing off a county sales tax ballot proposal until at least 2016 is a smart move because it could allow for a cohesive tax policy throughout the community.
County supervisors recently voted to table any consideration of placing a county sales tax on the ballot. They reasoned that the only realistic route – in order to gain the city council’s favor and allow for Hollister’s own Measure E sales tax to approach expiration – would be to wait a few more years.
County officials over the past year have been discussing the potential for a county sales tax increase similar to the city’s 1 percent levy – proceeds of which go entirely to local coffers instead of being apportioned out by the state.
Supervisors shelved the consideration of a countywide general sales tax – with talks of setting the rate at somewhere between 0.25 percent and 1 percent. They did so after discussing September intergovernmental committee talks involving Hollister officials who indicated they would not support the countywide tax, which would require the city to relinquish its recently approved tax.
County officials project that a sales tax could generate between $1.25 million and $5 million annually. The prospect started with a focus – from some residents and political leaders in the community – on trying to pass a special tax district for library and parks services. Surveys showed there would not be enough voter support for such a measure needing two-thirds of voters’ approval, so county officials turned toward the prospect of a general sales tax that would require a mere majority of voters’ support.
The city, though, stands in the way due to the conflicting Measure E tax. City officials, justifiably, would rather not even broach a further tax burden on Hollister residents already paying the additional 1 percent. Measure E takes the city’s tax rate to 8.5 percent, a quarter of a penny more than that of nearby San Juan Bautista, the only other incorporated town in the county.
Pushing off the county tax until 2016 allows for a possible tax-sharing agreement with at least Hollister, which might maintain most or all of its Measure E funding capacity beyond its early 2018 expiration. It also makes sense for all parties involved to wait and see how economic and fiscal factors play out in the next couple of years. At the same time, county and city officials should immediately start talks on a tax-sharing deal because there is no point in waiting for what will certainly be a complicated process.
There doesn’t appear to be any reason to wait when it pertains to talks of increasing the transient occupancy tax – those additional lodging fees known as “Welcome, stranger” taxes.
Supervisor Jerry Muenzer deserves credit for speaking out in favor of placing a TOT hike proposal on the 2014 ballot, an item supervisors were scheduled to discuss this week. He wants to increase the rate from 8 percent to 12 percent, putting it on par with the lodging fee in San Juan.
Such tax increases rarely hurt anyone’s political career – because the outsiders paying the extra fees generally don’t vote locally – while hotel and motel users have come to expect a certain, inconspicuous bump on their bills.
