news story / By Hank Sims

Tax Time

A roundup of hard-times revenue-raisers from across the county

(Oct. 9, 2008)  Even in the best of times, local governments in California have to scramble for funding. They live at the mercy of Sacramento, which has historically swooped in and snatched their money whenever it felt a need. And they are straightjacketed by 1978’s Proposition 13, which drastically narrowed their options for raising their own revenue.

But when the economy is in the tank things get really drastic. The cities and counties and school districts, which provide our bread-and-butter government services — police, fire, roads, education — are forever last in line. They must go directly to their cash-strapped citizens and beg for more just to keep civilization running. Four such agencies are doing just that on this ballot.

The city of Eureka has two tax measures on the Nov. 4 ballot: Measures D and E. The first is a sales tax increase of a quarter of one percent for all purchases within the city, raising the rate to 7.5 percent. The second raises the “bed tax” — the tax levied on hotel room rentals — from 9 to 10 percent.

Remarkably, the city this time has taken these measures to the ballot without incurring the wrath of the Humboldt Taxpayers’ League, the board of which recently voted to support the measures. In part, this is because D — the sales tax increase — simultaneously wipes out the unpopular Utility Users’ Tax, which adds three percent to the utility bills of city residents. But Leo Sears, the league’s designated spokesperson for the pro-D and E effort, said that the support largely boiled down to one fact: the city, and particularly the Eureka Police Department, really, really needs the money.

“I can assure you that if these measures do not pass, all the advances we’ve made here in public safety are going to go away,” Sears said. (The city will be conducting a series of informational meetings on the measures — see below for details.)

One municipality that’s not so lucky: tiny Trinidad, where the city’s efforts to retain a portion of its soon-to-sunset special city sales tax has met with stiff opposition from the Taxpayer’s League. Trinidad’s sales tax is now 8.25 percent — which makes it Humboldt County’s taxiest city, and one of the state’s — but it’s set to drop down to 7.25 at the end of the year. Measure I, if it passes, would instead set the rate at a clean 8 percent over the next four years, and provide for a citizens’ oversight mechanism to watch how the funds are spent.

It would mean higher bills at the hardware store, and at the town’s restaurants and tchotchke emporia. But there’s maybe a bigger issue: People who live in the town’s ZIP code but out of its city limits, are often unfairly hit with the extra tax when they order goods over the phone or online. There is a way to protest and reverse the unfair charges, but it’s a pain in the ass. Taxation without representation! The League disapproves.

The city of Arcata is also asking for a .75 percent sales tax bump, which would bring it up into line with Trinidad. Arcata is asking voters for a straight 8 rate over the next 20 years, which would generate an estimated $1.5 million in revenue for the city’s general fund — cops and potholes. Measure G has pretty wide support amongst the town’s establishment, but when the City Council put it on the ballot outgoing council member Harmony Groves dissented, objecting to the regressive nature of sales taxes and the far-off sunset date.

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