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Jul 25, 2016 | Headlines | 0 comments

Local sales tax being discussed

Headlines | 0 comments

Written by Jeanette Todd

Keywords: government

There is still plenty of interest in adopting a transaction and use tax, ala Measure K, the city confirmed last week. Measure K was on the June primary ballot and would have created a one-quarter cent sales tax countywide for public safety improvements.

The initiative failed by a narrow margin, with both Hanford and Lemoore voters gaining the required 66.67 percent of votes to pass it. Both Corcoran and Avenal voters were in favor by about a 65 percent margin, with the unincorporated Kings County area voting in favor by just over 60 percent.
It appears there is still plenty of interest countywide in pursuing the sales tax once again. Time is running short, with public hearing noticing required by July 18 to make the August filing deadline for the November ballot. Should the county decided not to pursue the sales tax, city council was open to attempting a sales tax initiative of its own.
City Manager Dr. Kindon Meik presented proposals for general fund income based on the city implementing a one-half cent, or a three-quarter cent sales tax increase, along with the income for the countywide tax. The council preferred going in with the remaining cities, but was willing to hedge its bets. Here’s a potential breakdown:
–The quarter-cent countywide tax could bring in about $340,000; it would boost the general fund revenue to over $2 million in the first year and continue to increase the reserve to about $2.4 million in the third year, before tapering back down in ensuing years to about $2.1 million.
–A city-only half-cent sales tax increase would generated enough to boost the general fund reserve to $2.35 million the first year, and the figure would continue to grow in following years to $2.7 million, $2.9 million, $3 million and begin to taper slightly.
–Adopting a three-quarter cent sales tax would provide the general fund reserve a $2.6 million ending the first years, increasing to $3.3 million, $3.7 million, $4.1 million and $4.35 million of the next few years.
The council instructed staff to move forward on a one-half cent sales tax initiative to have in place for the November ballot. Should the countywide effort be resurrected, the city will abandon its own sales tax increase measure.
The city sales tax increase will also be a general tax—not earmarked specifically for public safety—and will require just a 501 percent approval from the voters, instead of two-thirds in favor.
The council was also adamant the city needs not only to endorse, but actively promote, the sales tax measure that emerges the winner.

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