Last night, the SLO City Council placed a sales tax increase on the November ballot, joining Atascadero, Grover Beach, Morro Bay and Paso Robles in asking voters to increase sales tax to 8.75% — the same rate as Santa Maria and Santa Barbara.
Since March — through task force meetings, board and executive discussions, and countless conversations with more than 80 of our volunteer advisors — the Chamber has continued to engage in this discussion, explore the future we envision for this city, and determine what it will take to get there.
In a unanimous decision, our board voted to support the SLO Forward sales tax measure at 1.5% until ended by voters. This measure will support long term community and economic health and forward a number of priorities outlined in Imagine SLO including investments in:
- Retaining our local businesses
- Key infrastructure
- Open space
- Vibrant neighborhoods
One of the most promising opportunities for this measure is the ability to bond against it for significant, large scale projects – and there is a necessity to convene community discussions about what those priorities look like in practice.
We must ensure that business has a seat at the table for oversight and that we periodically identify and reevaluate priorities for long term community investment (you can see details of our argument in this letter we submitted to council). Council members are open to these ideas and will be making a decision on how to make this happen at their August 18th meeting.
Over our lifetime, we have never experienced a threat as menacing to our lives and livelihoods as this pandemic. Now more than ever, we see clearly the interdependence of business, government, community and public health and must once again pull together and invest in our community and our shared future.
We can’t rely on Sacramento or Washington DC, so it’s up to us to put in the hard work and commitment to help our businesses and residents rebound and come out the other side stronger and more resilient.
Why this measure
- Helping business | For the first time, retaining local businesses would be a spending priority for these revenues. Local businesses need help to survive this pandemic, to recover and the city needs healthy businesses as much as businesses need a healthy city. This is an opportunity to do more than we ever have to move forward and go further together.
- Self reliance and local control: Neither Washington nor Sacramento is positioned to help us; we have to help ourselves and ensure that control over how the revenues are spent is entirely in the hands of locals.
- Strict accountability: The Revenue Enhancement Oversight Committee has done a great job and will be made better with the inclusion of the business perspective – ensuring money is spent in alignment with community priorities.
- Long term benefits| The structure will enable the city to issue bonds to support needed investment in water security, traffic improvements and climate action.
- Visitors pay their fair share| Historically, more than 70% of sales tax has been paid by visitors, not by residents and a sales tax will ensure that visitors pay for their use of our city.
A brief history
- .5% general sales tax (an extension of Measure Y – see below)
- Passed in 2014 with support of nearly 70% of voters
- Included a provision for the creation of a citizen oversight body now known as the Revenue Enhancement and Oversight Commission or the REOC
- Revenue totaled $8.4 million in 2018–19 (adding approx. 12 percent to the general fund)
- More than 70% of revenue is used for capital investments (aka construction and equipment) while about 30% is used for operations (aka people that do the work)
- You can see all of the annual spending reports here.
- Largest areas of expenditure are streets, flood protection, safety and open space
- .5% general sales tax
- Passed in 2006 with support of 64% of voters
- Between 2008-2012, little over half of the $26.6 million raised was spent on infrastructure projects, and about one quarter on public safety, including neighborhood code enforcement. The rest went towards open space, flood prevention and traffic congestion relief.
How we measure up
A few highlights from the recent staff report (good stuff starts on page 56).
- The size of San Luis Obispo’s General Fund per capita is the median among benchmark cities.
- The General Fund is primarily used for operating programs (84%), capital improvement expenditures (8%), and debt service (5%).
- Less than 1% of San Luis Obispo’s governmental costs are interest payments on long-term debt, which is below the median, and about 3.6% below benchmark cities on the high end of the spending range.
- San Luis Obispo’s Transient Occupancy Tax rate would have to go from 10% to 21.9% to equal revenue from sales tax.
- Public safety costs for police and fire services are the most significant General Fund allocations in San Luis Obispo, accounting for about 43% of general operating costs. When compared to the eight benchmark cities, San Luis Obispo is below the median (47%)for these costs.
- San Luis Obispo’s public safety allocation is 24% Police and 19% Fire. This allocation ratio is consistent with most benchmark cities.
We will all be inundated with information about ballot measures over the next few months — please reach out if you have any questions, would like to know more about the Chamber’s positions or are looking for ways to get involved.