To tax or not to tax is a big decision for local governments as they grapple with placing Transactions and Use Tax measures on the November ballot in tough economic times.
The Colusa County Board of Supervisors on Tuesday voted 4-0 to place a .5 percent (one-half of one percent) special tax measure before the voters to specifically fund ground ambulance services. The City of Colusa voted 4.0 to place a 1 percent general tax measure before the voters later that evening. The City of Williams will consider placing a .5 percent tax increase on the ballot at their next meeting.
The City of Colusa’s measure and the City of Williams’ measure, if approved by voters, could be used to raise revenue that supports streets, public safety, infrastructure projects, and other general services.
Those measures would require approval of just 50 percent of the voters in those jurisdictions, plus one, officials said.
The governing bodies in all three jurisdictions acknowledged that the road to get voters to make informed choices will be tough, and will require multiple town hall meetings and other opportunities to explain the need to increase sales taxes.
The countrywide measure, recommended particularly by the rural fire chiefs and the County’s ambulance ad hoc committee (Chairman Merced Corona and Supervisor Daurice Smith) would require 66 percent voter approval and could only be used to sustain an ambulance system they said is failing in rural communities everywhere.
“This has been an outstanding situation since the county lost its second ambulance,” Smith said. “It’s been on the forefront of the board since before I was a member.”
The county, fire chiefs, and consultants have studied the causes for ambulance systems failures in rural communities for decades: a small call volume and low Medi-Cal and Medicare reimbursement rates that do not keep up with inflation.
In the 1980s, the Board of Supervisors placed an advisory measure before the voters asking if they would support a special tax increase for ambulance service if one was placed on a future ballot. According to Colusa County election results, a favorable response to the advisory measure was greater than 80 percent; yet, no further action was ever taken by the board to move forward.
The 2022 Colusa County tax measure, if approved by voters, would cost those who purchase taxable goods anywhere in the county a half cent on each dollar spent. Colusa’s tax measure would be an additional one cent on the same dollar.
Williams City Attorney Ann Siprelle said Colusa and Williams’ tax measures would be non-competing – meaning that additional sales taxes imposed by Colusa residents on goods purchased would result in no added increase on goods purchased in Williams.
However, she said a .5 percent increase in Williams’ taxes, which is already 7.75 percent, and a .5 percent increase on goods purchased in Colusa County, would be added to the cost of goods and service.
“It is something we need to consider,” Sirprelle said.
The city and the county of Colusa both have the state’s minimum sales tax of 7.25 percent, in which the state receives 6 cents on every dollar spent; the city gets one cent, and the county gets a quarter of a cent.
While cities and counties in Northern California tend to have the lowest sales taxes in the state, California, in general, has the highest sales taxes in the U.S., which can add up to a maximum of 10.75 percent with local taxes included. About 77 percent of counties have sales taxes greater than Colusa County. More than 90 percent of cities have sales taxes greater than the City of Colusa.
The Colusa County Board of Supervisors said the special tax measure they are proposing will not have a sunset date, although it would be possible for the board to later repeal the tax if the nation – as a whole- prioritizes revenue (increased federal and state reimbursements) for critical services that meet the health and safety needs of the population, while satisfying the requirement for counties to provide ambulance services to indigent people.
If approved by voters, the special tax would increase county revenue approximately $2.4 million.
The City of Colusa has proposed a sunset date in four years to prove to its residents that they will see substantial improvements with an additional $1.8 million in annual revenue.
“This put it back more back in the public’s hands…,” said City Manager Jesse Cain said. “If we don’t prove that things are getting done and that we need the money, then, if they pass it this time, they won’t pass it the next time. But if we show the citizens the need and show the citizens that we’re doing and actually accomplishing the things we said we were going to, then we should have no problems passing it again.”
Officials in all three jurisdictions said they would work between now and Nov. 8 to provide voters with all the information they need to make the decision on whether they would be willing to increase sales taxes to provide services.
One of the biggest misconceptions to overcome, they said, is that purchases of vehicles and farm implements in a city or county that has lower sales taxes save the buyer money.
Officials said they don’t as vehicle and large equipment purchases are taxed in the jurisdictions where the buyer lives. ■