The city council once again peered into the future during last week’s regular meeting, receiving a glimpse of a desperate budget scenario. Absent some form of action, the city’s general fund will continue to decline over the next five years, resulting in $1 million in red ink by fiscal year 2021-2022.
To alleviate that outcome, the council has given the go-ahead to a one-cent sales tax increase. Should local voters favor the measure, which could be on the ballot later this year, the city could raise just over $1 million a year in additional revenues. The sales tax would actually rebuild the general fund, providing a $3.67 million cushion in the general by 2021-2022.
“Even if we move quickly on this,” said City Manager Dr. Kindon Meik, “It would still take at least 120 days to get it on a ballot and we would not see the benefit until at least September.”
And, the additional revenue to the general fund is based on no added expenses, in personnel, programs or projects.
Corcoran is one of the few California cities that have not added a transaction and use tax (add-on sales tax) to augment their budget. As of this month, 201 cities statewide have one in place. In the Central Valley, Corcoran and Hanford are two of the few that have not already implemented an additional sales tax increment. Wasco, Tulare, Visalia, Delano and Porterville have already increased their sales tax by a cent.
“We all agree we have to do something. By doing this, we are not out of line with other surrounding communities,” noted Mayor Ray Lerma.
The council also asked staff to move forward on information regarding a utility user tax and the possibility of allowing a cannabis cultivation business to operate in the city. Such businesses are now allowed following the recent state election that approved recreational marijuana. The city could benefit from licensing and operational permits for such a business. The City of Coalinga is already moving forward on a marijuana manufacturing operation.
The utility user tax could see additional taxes added on different utilities, including gas and electric, phone and cable bills.