Elk Grove to Consider Sales Tax Increase to Fund Road Maintenance

April 4, 2014 | At the Wednesday night Elk Grove City Council meeting, council members will be asked to consider a sales tax increase t...

April 4, 2014 |

At the Wednesday night Elk Grove City Council meeting, council members will be asked to consider a sales tax increase to help repair and maintain city roads.

According to the staff report from the public works department, it is expected the city will need to spend about $12 million annually to maintain roads in their current condition. This represents a shortage of about $8 million per year based on current budgets and projected maintenance needs for the next 20 years.

Elk Grove faces an annual $8 million road maintenance shortfall.
The matter was originally brought to the council last October when public works director Richard Shepard gave an initial report on the matter. At the time, the council deferred a decision in hopes that Sacramento [county] Transit Authority (STA) would seek placement of a ballot measure this fall seeking an 1/2 cent sales tax increase for county-wide transit needs.

Polling by the STA found scant support for the ballot measure that requires two-third approval so the effort was scuttled. Had it been placed on the ballot and approved, Elk Grove could have received up to $6.8 million.

The council will be asked to consider three possible alternatives to raise the money needed for road maintenance.

The alternatives, as described from the staff report are as follows:

OPTION A: Pursue a Special Tax to increase sales tax by ½ cent. This would raise an estimated $10 million annually. Passage of a special tax requires a two-thirds supporting vote of the public (66.67%). If it is desired to place such a measure on the November 2014 ballot, a majority of Council would have to approve the measure ballot language on or before the June 11, 2014 scheduled City Council Meeting. 

A Special Tax can only be used for the purpose identified in the ballot measure. In this case, the new revenues would be dedicated to Transportation uses as described above. 

OPTION B: Pursue a General Tax to increase sales tax by ½ cent. This would raise an estimated $10 million annually. Passage of a general tax requires a simple majority vote (50%+1) of the public; however, the following criteria must also be met: 
a. requires 2/3 approval by the legislative body to place the general tax measure on the ballot (would require support from four of five Council Members); 
b. must be considered as part of a general municipal election in which elected member seats of the legislative body are up for election (November 2014 would meet this requirement). 

A General Tax is not restricted on how the new revenues would be used. However, it may be possible to include a non-binding advisory provision in the ballot materials indicating the City’s intent to use the new tax revenue for specific purposes, such as roadway maintenance and transit. However, as a general tax, the funds could be used for other general government purposes if the City so desired.

OPTION C: Pursue a City Wide Benefit Assessment District to generate an estimated $8 to $10 Million annually. To implement the assessment district, the City would need to demonstrate a special benefit to assessed properties, which would be the subject of further study and analysis. Staff anticipates that the City could make the appropriate benefit determination as to roadway maintenance, since there is a direct benefit to property owners in having the City’s road network maintained. However, it is uncertain whether a parcel assessment would be appropriate to increase revenues for the transit or capital components because a parcel benefit determination may be more difficult to make for these items. However, as noted, the issue of benefit determinations and possible assessments would require further analysis and study before implementation. 

In order to create a parcel assessment, the fair share cost of each parcel must be determined and every parcel owner must be notified by mail of the assessment with an included ballot to return. Council could then impose the assessment as long as a majority (50%+1) of the ballots returned are in  4 of 5 favor of the assessment. The majority vote is determined by the weighted average of parcels based on the amount of that parcel’s assessment. Preliminary estimates indicate that an annual parcel assessment of $150-$250 would generate approximately $8 to $10 million annually.  

Wednesday night's meeting starts at 6 p.m.   



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9 comments

Just a Taxpayer said...

It would be interesting to go back each year and research how the city squandered their CIP money each year and put us in this position. Last year the sound wall along Stockton Blvd. got the buckaroos. Poor policy decisions and poor leadership=new taxes! Wonder if that $7,000 ad teasing Houston was worht it now? Wonder what their streets look like?

Cell Phone Tax Payer said...

Current Comparable Sales Tax:

Sacramento- 8.5%
Folsom- 8.5%
Elk Grove- 8%
Citrus Heights- 8%
West Sacramento- 8%
Rancho Cordova- 8%
Roseville- 7.5%
Rocklin- 7.5%
Lincoln- 7.5%
Auburn- 7.5%

Source: http://www.boe.ca.gov/cgi-bin/rates.cgi?LETTER=E&LIST=CITY

Anonymous said...

Mrs. Gill and mouthpiece Branerd were bragging balanced budget in 2013
http://www.elkgrovecity.org/public-info/press-releases/2013/pr-06-14-13.pdf

Jughead said...

Being an election year, it will be interesting to see how the council members will posture on this.

For Cooper, this could be a very perilous situation. If he votes to put it on the ballot, it will dog him now through November, that is if he makes it out of the primary. I am sure the young whippersnapper out of Lodi must be grinning ear to ear. If nothing, it will be a good punchline for him.

Does this dash Davis' pie-in-the-sky schemes? If he votes to put this on the ballot, it will give some mainstream fiscal conservative a great two-by-four to bludgeon over his head now through November. I am sure Hume will sit back and snicker as the Mayor starts blinking and twitching now through November.

As for Hume, he will vote against anything that will give any yet-to-be-determined opponent an opening. Sneaky, but wise.

Interesting indeed.

Just who wants to go into an election with an opponent armed with this sort of ammunition?

Anonymous said...

Will be interesting & entertaining indeed ....wonder which little whippersnappers put that on the agenda at election time? Gonna take you down if you vote for it. I may have to go to the counci meeting just to watch this exchange.

Anonymous said...

I thought the LEADERS at city hall were the all star bean counters!!!!!!

Coffee Bean said...

First we had "I may have drawn the circle too big" for the Whitelock/EG Park interchange, now we have "I may have drawn the potholes too big"! I Look for this latest political bombshell to be buried for another year until after the election.

Anonymous said...

Suburban development is like a Ponzi scheme.

Developers pay development fees. City loads up on development fees and spends like there is no tomorrow.

Kitty gets emptied and it is back to the trough for more development.

A slow down in development can bring on financial problems.

What do you do?

Either allow more development or jack up the taxes.

Wait until the pension dangling knife comes dropping down on the city.

Anonymous said...

An across the board sales tax increase for the dupe-able taxpayers.

What about the gas tax, the vehicle fees and taxes and the current funding from the Obama administration for public works projects? No mention of that in the report. As said in part above...just some more Ponzi-type scheming that will eventually catch up with the taxpayer in the future.

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