The City of San Ramon is a step closer towards placing a 1% sales tax measure on the November ballot after its July 25 meeting.
The move comes after the council voted unanimously to approve a draft ballot measure after which includes a 1% temporarily San Ramon specific sales tax, a 10-year sunset and a citizens oversight committee.
In February 2024, the Council began evaluating and proposing expenditure reductions to reduce the budget—including possible cuts to personnel and service delivery. By March, the council authorized staff to begin looking into a revenue enhancement.
San Ramon is facing a $17.6 million structural budget shortfall in 2024-25 and the gap increases to $52.3 million by Fiscal Year 2028-29 if no action is taken. They have an even higher gap of $109.9 million if all unfunded capital improvement projects are included.
The city had actually been looking at a revenue enhancement since 2016, however, they never moved forward. They had looked at multiple options:
- Property Transfer Tax – only generate $1 million to San Ramon
- Hotel Bed Tax – only generates $2 million to San Ramon (if tax doubled)
- Business License Tax – only generates $367k
- Sales Tax – has potential to bring in $15.7 million.
Note – it is estimated that 30% of San Ramon sales tax comes from non-San Ramon residents.
2024 Sales Tax Rates (source)
El Cerrito | 10.250% | Contra Costa | City | |
Antioch | 9.750% | Contra Costa | City | |
Concord | 9.750% | Contra Costa | City | |
Martinez | 9.750% | Contra Costa | City | |
Moraga | 9.750% | Contra Costa | City | |
Orinda | 9.750% | Contra Costa | City | |
Pinole | 9.750% | Contra Costa | City | |
Richmond | 9.750% | Contra Costa | City | |
San Pablo | 9.500% | Contra Costa | City | |
Hercules | 9.250% | Contra Costa | City | |
Pittsburg | 9.250% | Contra Costa | City | |
Pleasant Hill | 9.250% | Contra Costa | City | |
Walnut Creek | 9.250% | Contra Costa | City | |
Brentwood | 8.750% | Contra Costa | City | |
Clayton | 8.750% | Contra Costa | City | |
Contra Costa County | 8.750% | Contra Costa | County | |
Danville | 8.750% | Contra Costa | City | |
Lafayette | 8.750% | Contra Costa | City | |
Oakley | 8.750% | Contra Costa | City | |
San Ramon | 8.750% | Contra Costa | City |
Council Commentary:
Vice Mayor Scott Perkins justified their efforts noting 20 positions were cut or frozen while cost increases have occurred.
“I assure you this council did not make easy decisions on where we cut and we looked four different funding mechanisms to try and make up most of the difference going forward,” explained Perkins. “I’ve been on the council for almost 21 years, Dave (Hudson) 25 years, and we have never, in all of that time, asked the citizens to raise taxes like they have multiple times. We haven’t asked for a parcel tax, haven’t asked for a sales tax, TOT or any other revenue measure going to the citizens as Oakland, Richmond, Berkley, most every other city in this surrounding area.”
He added San Ramon was in the lowest tier of sales tax, property transfer, transient occupancy tax.
“I believe we have done a fabulous job working within the revenues that we have,” said Perkins. “We do not have the big sales tax generators like Dublin or Pleasanton. They have huge car dealerships, they generate millions per year. Danville has the Costco. Our citizens fought against the Costo 25-years. Danville gets the revenue, San Ramon gets the traffic.”
Councilmember Marisol Rubio echoed Perkins and why they are obliged to support the measure.
“I just think the strategy of kicking the can down the road is the strategy that has been used for the last 5-years and every year we were falling short and shifting money around and that is not a good strategy,” stated Rubio. “I often times try to remind people that the same way your cost of living is going up, well our operations and costs are going up.”
She advocated that when your cost of living goes up, you have to try and find more money.
“The city is in the same boat and the city has done everything possible to hold off and to push it off. But there is a threshold and at some point we have to cross that line,” stated Rubio. “If we don’t, we put at risk the quality of live and services this community has become accustomed too and experienced. I wouldn’t want to see that happen to our citizens.”
Councilmember Mark Armstrong appreciated with the 1% sales tax its not just San Ramon residents who will pay it, but everyone who comes to the city and buys something.
“Everyone who buys things in the city of San Ramon, whether they are from San Ramon or not they are going to help share that cost in keeping our quality of life high,” said Armstrong. “This 1% increase, we get 100% of that which will come to the city of San Ramon and not distributed out to the county or special districts or other things. It all goes to maintain quality of life and maintain our services.”
Councilmember Sridhar Verose highlighted for the past 20-years, they have not asked for any tax increases.
“That shows that any of us don’t want to raise the tax,” said Verose. “None of us on this bench are passionate about taxes. We all know what is going on at the state and city level, but then in this case, its not San Ramon, it is not the city in this case, its unfortunate circumstances. First it was COVID, then inflation, the quality of services we want to deliver.”
Verose said this was the right approach for San Ramon after going through the process while staff did a lot of work on options and how to reduce the expenses.
“This looks like the best option that we have,” said Verose. “San Ramon is known for quality, we want to continue the quality.”
Mayor Dave Hudson cautioned San Ramon still needs to collect more sales tax even with the ballot measure.
“Whether this passes or not, the bill could still pass and you still would not get enough money if nobody buys in San Ramon. You have to get your sales tax by people purchasing. Somehow, that keeps getting lost in this,” said Hudson.
With a 5-0 vote in support, the item returns in July 23 for a final vote.
Proposed Ballot Question:
“To provide local funding to maintain City of San Ramon programs, services and facilities, including: public safety and police services; neighborhood crime prevention; traffic enforcement and road safety; street and road improvements and maintenance; library and recreation services; park maintenance; youth, senior, and cultural programs; and other city services and facilities; shall the City of San Ramon levy a one cent sales tax, providing approximately $16,000,000 annually for 10 years, subject to public review, annual audits, and all funds benefitting San Ramon?
BALLOT MEASURE PROCESS
The following steps will outline the process for placing a sales tax measure on the ballot:
- July 23, 2024: City Council passes resolution, formally placing the measure on the November 5, 2024 ballot; this action should include direction regarding the authority to submit a ballot argument in support of the measure and a potential rebuttal argument.
- August 9, 2024: Filing deadline to submit ballot measure to Contra Costa County Board of Supervisors and the Elections Division of Contra Costa County Registrar of Voters
- August 12, 2024: Local measure letter assigned
- August 16, 2024: City Attorney to prepare and submit an impartial analysis
- August 21, 2024: Filing deadline for Primary arguments. Primary arguments must be filed with the Contra Costa County Elections Department through submission to the City Clerk.
- August 26, 2024: Filing deadline for Rebuttal arguments. Rebuttal arguments must be filed with the Contra Costa County Elections Department through submission to the City Clerk.
- November 5, 2024: Election Day
FINANCIAL IMPACTS
Staff previously included $110,000 in the FY2024-25 budget to cover the estimated elections costs. The City Clerk’s Office will request to increase appropriations during the FY2024-25 mid-year budget update process to cover any additional ballot measure costs. The County typically invoices the City for associated costs in the fourth quarter (late April) following an election.
Passage of a local one cent per dollar (1%) transactions and use (“sales”) tax would generate approximately $15.6 million in additional revenue per year and, after meeting the City’s funding reserves policy requirement of 36%, would leave approximately $10 million available to address the City’s $17.6 million structural deficit.
Failure to pass a local one cent per dollar (1%) transactions and use (“sales”) tax would require additional personnel and service cuts to balance the structural deficit outside the use of one-time available funding. The City Council adopted the cuts outlined in Attachment E of this staff report and would be presented a similar list for consideration when balancing the budget.
Staff Report – click here
Previous Stories:
1 comment
Comments are closed.
Add Comment