Elk Grove Approves Local Economic Stimulus Program

The Elk Grove City Council unanimously approved a $250,000 economic stimulus plan at its regular meeting tonight. In an effort to s...

The Elk Grove City Council unanimously approved a $250,000 economic stimulus plan at its regular meeting tonight.

In an effort to spur local business activity, effective August 1, the first 500 purchasers of a new car at the ailing Elk Grove Auto Mall will receive a $500 gift card. The cards will be redeemable at participating local businesses and national retail chain stores.

The city will make $150,000 in store issued cards from retailers such as Target and Wal Mart and $100,000 for locally owned merchants and service providers available. As part of the recently launched “Think, Shop, Live Elk Grove” program promoting local businesses, the stimulus program is aimed directly at the ailing Elk Grove Auto Mall which is a major source of tax revenue for the city.

Elk Grove receives 1 percent of the sales tax from the local sale of each new car and an annual reimbursement from the DMV. According to the National Automobile Dealers Association, the average price of a new car sold in the United States is $28,400

At this rate the city would receive $284 in sales taxes and an unspecified DMV reimbursement. For the current fiscal year the city expects to receive $540,000 in DMV fees.

According to city finance director Rebecca Craig, the city is funding the program based on a larger than expected cable franchise refund that was $275,000 more than budgeted.

"By helping them [auto mall dealers] we would then help the other local merchants," Craig told the council.

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Anonymous said...

$500 isn't going to help if I am in risk of more furlough days and pay cuts.

Who is going to risk buying a $20,000 + car when the spectre of layoffs and furloughs loom?

Anonymous said...

I am curious, where did the City Council find the $250,000? We are hearing how tight the city is financially, and that they have to lay off people. Wouldn't it be a better stimulus package to keep people working so they COULD "Shop Elk Grove"?

Anonymous said...

Councilmember Hume explained where the $ is coming from, not from the budget. Watch the council meeting for this item for his explanation.

Insania said...

So the money comes from a cable franchise refund, which presumably was earlier paid out of our general fund or from the budget; that is, our taxes.

To me, this is a subsidy to our Auto Mall to help them sell more cars. We'll (effectively) tax ourselves to gain tax revenues from car sales.

Of course we also have "local washing" going on with the characterization that spending a $100 WalMart voucher to buy Chinese-made house wares we're somehow Thinking, Shopping, and Living Elk Grove, that we're helping our local economy. The Elk Grovian economy is as far from a local economy as can be, with national chains dominating our strip retail selling products made elsewhere. Will you expect one single locally owned retailer, selling locally made products to lease space in our soon-to-be completed Promenade? Not gonna happen.

Sure, sales tax receipts will come in by buying locally, but buying a pair of Jeans assembled in Bangladesh at the "local" TJ Maxx is decidedly not local, no matter how much the city spends to make you believe it.

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