Tuesday, July 8, 2014

County Moves Forward with Tax Hike

Posted By on Tue, Jul 8, 2014 at 12:15 PM

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There’s a tax measure coming to a ballot near you. In fact, if you live in a city, you’re likely to see a couple of them.

The Humboldt County Board of Supervisors voted unanimously this morning to move forward with putting a county-wide sales tax before voters in November, though there’s still some questions as to whether the board will opt for a .5 percent or a .75 percent levy.

County Administrative Officer Philip Smith-Hanes told the board that polling commissioned by the county found 63 percent of probable voters said they would likely vote in favor of such a measure and that the number didn’t vary much when asking voters about a tax of .25 percent, .5 percent or .75 percent. Smith-Hanes said a .25 percent tax is projected to bring in about $3 million in additional revenue for the cash-strapped county, while a .75 percent sales tax would generate a projected $9 million.

The tax would be implemented county-wide, meaning it would be levied in cities as well as unincorporated areas, and would be tacked on top of existing sales taxes. For example, Trinidad and Arcata currently have local sales taxes of .75 percent that they impose on top of the state’s 7.5 percent sales tax, bringing the total tax rate for purchases in the cities to 8.25 percent. The county tax would fall on top of that and, potentially, bring the tax rates there up to as high as 9 percent.

Smith-Hanes noted that the county tax will not be the only one on November ballots, noting that Fortuna is proposing a 1 percent sales tax hike, Blue Lake is putting a utility users tax on the ballot, Eureka is pushing to renew its .5 percent transaction and use tax and Rio Dell is also mulling putting forward a revenue-generating measure.

The board’s discussion Tuesday made clear the board is moving forward with gnashed teeth. Board Chair and 1st District Supervisor Rex Bohn, at one point, proclaimed that he hates both taxes and government but that he appreciates governmental services, which are in dire need of additional revenue. Third District Supervisor Mark Lovelace countered that he likes government and doesn’t resent taxes any more than he does paying for something at the store. Taxes, Lovelace said, are simply a payment for services.

Lovelace and Second District Supervisor Estelle Fennell both voiced support for moving forward with a .75 percent sales tax, but the balance of the board preferred the .5 percent version. The board agreed to return to the issue next week, when it will vote on a first reading of the proposed measure. For more on the county’s budget situation, read past Journal coverage here. And for more on the board’s tax options and polling done on the issue, see the county staff report from today's agenda packet here.
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