Here’s Where Your Sales Tax Money Goes

 

 

Editorial: Voters, here’s where your sales tax money goes

Martinez sales tax hike deserves voter support. Increases and extensions in Albany, Alameda and Antioch don’t

 

UPDATED: October 3, 2018 at 9:21 am

 

You just bought that fancy $1,000 computer and had to fork over about $90 more in sales tax. Ever wonder where that money goes?

Now’s a good time to ask, especially if you vote in one of four East Bay cities with sales tax measures on the Nov. 6 ballot. Our recommendations are below.

But, first, here’s the answer to the question: For every dollar of taxable goods purchased, the state charges an additional 7.25 cents, of which it keeps 6 cents and doles out 1 cent to local cities and 0.25 cents for county transportation funding.

In Alameda County, there’s another penny tacked on for transportation funding, a half-cent for health care services and a half-cent for BART, for a total of 9.25 cents on every dollar of goods.

In Contra Costa, the rate includes a half-cent for transportation and a half-cent for BART, for a total of 8.25 cents.

Now come the cities, who already get a penny out of the state share. Many of them also have their own sales taxes. It’s those city sales taxes that are the issue of the ballot measures in Albany, Alameda, Antioch and Martinez.

Click here for a complete list of our election recommendations.

Albany: No on Measure L

Albany has its own half-cent sales tax, bringing its total to 9.75 cents on the dollar. Only 23of the state’s 482 cities have a total tax rate at least as high.

The city’s half-cent tax is due to expire in 2021. Measure L would extend it — permanently. That alone is reason to vote no. The sales tax money can be used for any municipal purpose. Voters should have a chance to periodically review it.

Especially in Albany, where property owners  already pay eight separate city parcel taxes totaling $449 for things such as libraries, sidewalks, road paving and street lighting.

And where, for every $100,000 of assessed value, homeowners pay $82 a year to help cover the cost of public employee pensions and city bond obligations.

There’s more: When property owners sell their homes, the city charges an exceptionally high transfer tax of $1,150 for every $100,000 of value. That’s hard-earned homeowner equity transferred straight to city coffers.

Meanwhile, city general fund expenditures are forecast to rise 41 percent from fiscal year 2015 to fiscal year 2020. That raises legitimate questions about the city’s cost controls, questions voters should ask now and have a chance to ask at least once a decade. Vote no on a permanent city sales tax.

Alameda: No on Measure F

Alameda would also become one of the top sales tax cities in the state if Measure F passes. Alameda officials want voters to approve a permanent half-cent sales tax, bringing the total tax to 9.75 cents on the dollar.

The city tax would go into the general fund, to be used for any purpose — which in Alameda, given the firefighter union’s exceptional political influence, should give voters pause about how the money will be spent.

The city already receives an unusually large transfer tax on every property sale, equal to $1,200 for every $100,000 of value. Yet it has a mammoth debt for its employees’ pension and retiree health programs. The $352 million shortfall is roughly 6 1/2 times the city’s base payroll.

Voters should reject another permanent tax that provides no assurances the city’s debts will get paid off and no chance for voter review in future years.

Antioch: No on Measure W

Antioch seeks to increase its city sales tax from the current half-cent to a full penny on the dollar. That would raise the total sales tax from 8.75 percent to 9.25 percent.

We supported the city’s 2013 ballot measure that created the current half-cent sales tax. Times were tough for the city largely because property values, and property tax revenues, had plummeted. We were sympathetic.

But we’re now nearly a decade out of the recession. Our concern expressed then about ending the gimmick that enables workers to spike their pensions by 8 percent to 9 percent has not been addressed.

And now city officials have been unable to provide us with useful long-range budget forecasts that support the proposed Measure W doubling of the city sales tax for 20 years.

Finally, the lack of transparency in the ballot wording is troubling. It says that the measure is to “renew the sales tax at the one-cent rate.” (Emphasis added.) That’s misleading. This measure doubles the sales tax to the one-cent rate.

Voters should reject Measure W. The current sales tax lasts through 2021. That gives city officials sufficient time to come back with a supportable extension of the existing tax, a more reasonable expiration period, and transparent ballot wording.

Martinez: Yes on Measure X

Like Antioch, Martinez seeks to increase its city sales tax from the current half-cent to a full penny on the dollar. That would raise the total sales tax from 8.75 percent to 9.25 percent.

But unlike Antioch, Martinez’ original half-cent sales tax is restricted to road improvements. So Measure X would be the first city sales tax for the general fund.

And looking at the city’s budget forecasts, the extra $3.2 million the sales tax would generate is sorely needed. The city, like most in California, faces rising pension costs. But there are no extraordinary benefits in Martinez like in some cities.

The city needs the money. We wish the sunset period for the new tax were less than 15 years, but we can live with it. Voters should approve Measure X.