2017-04-20 / Front Page
Sales tax hike suggested
Topic comes up during capital budget discussion
With the city facing a recurring deficit in its streets and roads budget, Finance Director John Adams and Councilmember Rob McCoy seemed to indicate at last week’s council meeting their support for a possible citywide half-cent sales tax that would go directly to municipal coffers.
Thousand Oaks’ current sales tax rate is 7.25 percent, the lowest allowed by law.
During an April 11 discussion of the city’s upcoming capital improvement budget, McCoy said he’d asked City Manager Andrew Powers how much could be raised by a half-cent sales tax hike in Thousand Oaks.
“He gave me a figure of about $14 million annually,” McCoy said.
If such an increase was meant for the general fund it would need the approval of the majority of T.O. voters, but if the extra money was earmarked for a dedicated fund such as road improvement, it would need a supermajority vote to pass.
Referencing Senate Bill 1—recently enacted state legislation that will increase the gas tax and vehicle-registration fee to pay for road repairs—the council member said he’d prefer to keep as many tax dollars local as possible.
“They’re going to pull out of our city, if we just look at 50,000 drivers, $15 million, and they’re going to give us $3 million back,” he said. “If we did a half-cent sales tax, we’d get $12 (million) to $14 million, and it would all go to us.”
Adams, who’s been keeping the council apprised of the $4.5-million deficit in its streets/roads budget, responded to McCoy by saying that such a tax is “certainly something the council should consider going forward.”
“When we decide to do our own tax measure—or look at that option—you get 100 percent returned back to your local agency,” Adams said.
The finance director said the practice of cities instituting their own dedicated sales tax measure is common around the state. In Ventura County, Oxnard, Ventura, Santa Paula and Port Hueneme all have such a tax.
“We are at 7.25 percent,” Adams said, which puts Thousand Oaks in the minority in the state, where 75 percent of cities have some type of add-on tax.
The council was told in January that it faces a $4.5-million annual spending gap if it wants to maintain its current level of service and maintenance for roads.
The January report identified road and street funding as a significant area for concern due largely to the loss of state and federal funds that previously went to road rehabilitation.
Even with an expected influx of money from SB 1, the city wouldn’t get enough funding back from the state to make up the difference going forward, Adams said.
To see McCoy, a Republican, speak in favor of such a tax increase was a surprise to those familiar with the fiscally conservative platform he ran on in the 44th Assembly District race in 2014. He was also an ardent opponent of Measure AA, a similar countywide tax floated by the Ventura County Transportation Commission that was defeated in November.
“Though I voted against Measure AA, I see a need for an increase in the funding for our roads,” McCoy said. “If we’re going to be burdened with a tax, we need to get the most out of it as possible.”
The city tax differs from AA and SB 1 in that the city would get to keep and use every penny collected, he said.
After the brief back-and-forth between McCoy and Adams, no other council members chimed in with opinions on the possibility of a sales tax measure.