An end to the organized version of the Hollister Independence
Rally would bring a handful of guarantees.
An end to the organized version of the Hollister Independence Rally would bring a handful of guarantees.
Bikers and some local residents would be irate. Some residents would be happy. A few downtown businesses would be crushed.
And the city’s sales tax rolls would take a dive.
Since the rally officially began in 1997, sales tax revenues to local jurisdictions have steadily risen – at an average hike of about $150,000 each year, according to documents provided by the Hollister Independence Rally Committee (HIRC).
Rally organizers recently obtained figures from the California State Board of Equalization that show a 77-percent increase in sales tax earnings since 1997.
Hollister brought in $2.17 million in sales taxes in 2002, the most recent available figure, according to the documents. Though three agencies – Hollister, the Redevelopment Agency and San Benito County – split the revenues, according to Hollister Finance Director Barbara Mulholland.
She didn’t know the exact numbers. Those figures provided by HIRC seem close to accurate, she said. Yet she called them “high-end” estimates.
There is currently no precise calculation of sales tax earnings over the July 4 weekend because the city accounts such revenues only on a quarterly basis – or four times a year, Mulholland said.
Regardless, she said, the end of HIRC’s involvement would surely leave another hole in the city’s General Fund budget.
“Have you tried to get anything to eat around here on the rally weekend?” Mulholland said. “It’s an adventure.”
Rally organizers are hoping to drive home a point – that sacrificing the event because of financial drawbacks would also assure severe losses in tax dollars.
“We know the average person that attended our rally spent more than $100,” said HIRC Treasurer John Loyd.
Mayor Tony Bruscia pointed out that much of the gains in sales tax revenues have been stimulated by other factors – not just the rally.
The population has grown, he said. Plus, there are more retail businesses, such as the relocation of Dorothy McNett’s Place, Staples and other stores moving in on the city’s south side.
“I think it takes away some of the argument,” Bruscia said.
But he did concede the financial impact of the rally is significant. And the economic “ripple effect,” he said, is yearlong.
“It’s hard to quantify how much that rally means to the community,” said Bruscia, who mentioned he is trying to get help from state Sen. Jeff Denham (R-Salinas), as the state coffers also benefit from the event.
The city plans to credit HIRC with $60,000 for projected sales tax earnings, officials say. That would lessen the blow of $280,000 that must be earned to make up for extra security costs in 2004.
Still, rally organizers don’t think that amount is nearly enough. And some business owners agree – including Ignacio Velazquez, owner of The Vault restaurant.
Velazquez, who says his restaurant stays afloat largely because of the rally, believes the Fourth of July weekend brings in about $15 million to $20 million in extra sales citywide.
And with Hollister government’s 1-percent share of local sales, that would equal about $150,000 to $200,000 in revenues. Loyd’s estimate was in the same range – about $140,000 to $160,000 a year, he said.
“It’s way low – extremely low,” Velazquez said of the city’s credit.
Mulholland said the city’s credit estimation was made in 1997 before she arrived one year later. She called it “the minimum number we look at.”
Velazquez is among many business owners and officials counting on a new policy in 2004 requiring street vendors to use cash registers.
In past years, vendors didn’t keep receipt records and, therefore, didn’t have to show proof of their earnings.
“There is a lot of cash sales that go on during the event that may get forgotten,” Councilman Tony LoBue said.
But there may not be an opportunity to test the new system, as Hollister and HIRC have not agreed to a contract for the scheduled 2004 event.
Two major roadblocks remain: The city can’t find enough outside officers to police the event, and Hollister management wants assurance HIRC can earn the necessary revenues to break even.
