Staff expected to present information to Council on July 9
PASO ROBLES – City of Paso Robles staff broached adding a sales tax measure on the November ballot during its budget presentation to City Council on Tuesday, June 16.
Due to the drop in revenue from the COVID-19 stay-home restrictions that forced many businesses to close for up to two months, the City dipped into its reserves and made other reductions to fill a projected $13 million shortfall in the 2020-21 budget.
“Given the challenges outlined, which have been exacerbated by COVID-19, in order to continue to provide City services at the level that the community expects, the City and its taxpayers must explore all potential solutions,” City staff stated referring to the potential for a sales tax measure during its budget report Tuesday evening.
City Manager Tom Frutchey said adding a tax measure to the November ballot was not a given. However, it was something to be explored and brought back for additional discussion at the Council’s meeting on July 9.
Frutchey said the last opportunity the Council would have to decide at a regular meeting is July 21 to have it added to the ballot. Aug. 7 is the last possible day for measures to be added and then appear on the Nov. 3 ballot.
“The purpose of the meeting on July 9 is to bring you preliminary information,” Frutchey said to the Council. “Give you the chance to ask us any questions and bring back all the necessary information so you can make your decision on July 21. It’s important for the public to know the Council has not in any way made a decision on this matter and really has not addressed it in any detail. Staff is doing its research and developing that information because of the critical need.”
Frutchey said visitors to Paso Robles pay a third of the sales tax. The City’s current sales tax rate is 7.75 percent.
With businesses temporarily shut to help curb the coronavirus spread, the City realized it was not going to see the projected revenue from sales tax and transient occupancy tax.
Much of the Paso Robles economy relies on tourists and this ground to a halt as people stayed home following Gov. Gavin Newsome’s order in March. The state began reopening in late May.
Staff explained that making reductions of the magnitude made in the 20-21 budget is unsustainable in future years. As community priorities and needs continue to evolve, the demands on the City, in public safety and other essential services will continue to escalate.
The City continues to pursue all options for non-tax revenues, but those options are limited, Frutchey said.
“Efforts to contain expenditures and find efficiencies continue to be part of the ongoing operational ethos for the City of Paso, but those reductions can also only take us so far if services are to be maintained at the level that the community expects,” City staff stated.
Based on 2018 and 2019 polling results, 6-in-10 believed the City needs additional funds to provide the desired level of service and to improve street maintenance. Based on Council direction at the May 5 meeting to analyze the option of placing a taxation ballot measure on the November ballot.
In 2018 voters, Paso Robles floated a half-cent sales tax measure that voters did not pass (53 percent). If passed, it was estimated to bring in nearly $5 million to the City annually.
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