City officials work to address skepticism on sales tax increase
The skepticism is understandable: If you ask people to pay an extra penny for every dollar they spend in Bakersfield, they’re going to want to know where the extra money goes.
So it is with the city’s efforts to build support for a proposal to raise Bakersfield’s sales tax rate from 7.25 percent to 8.25 percent. If the City Council approves at a meeting set for June 20, the increase will appear on local ballots come November. A vote of 50 percent plus one is all it would take to pass the increase.
Predictably, not everyone is anxious to raise local taxes. Groups including the Kern County Taxpayers Association have raised concerns the added tax receipts could be spent at the city’s whim, without strict accountability and transparency.
It’s not that the association is necessarily against the idea of a tax increase, said the group’s executive director, Michael Turnipseed. He acknowledged the benefits of raising more money so the city can hire additional police officers and otherwise invest in improving Bakersfield’s quality of life.
The problem, as he sees it, is that the city’s proposed ballot language hasn’t been clear enough about precisely where the money would go.
“It is very, very general, and part of our problem with it is that it’s so general the city can spend (revenue from the proposed tax increase) on basically anything,” Turnipseed said Wednesday.
Bakersfield City Manager Alan Tandy said he and his staff have been working recently to address such criticisms by promising additional measures that would spell out exactly where the money is spent, and institute a high level of accountability.
An oversight committee would be formed to ensure the city allocates the additional revenues as proposed, Tandy said. There would also be an accounting system set up so city residents can easily check where the money goes.
Much of this is brand new. When the city reaches out to local groups in an effort to win their backing for the tax increase, he said, staff come back with ideas that are then folded into the next pitch. The result is a plan that, in his view, responds to reasonable skepticism.
The proposal “has come a long way,” Tandy said. The city’s slideshow outlining the plan “has literally changed, I think, every time we’ve presented it.”
Revenue from Bakersfield’s sales tax go into the city’s general fund and pay for a variety of local services, including police and fire protection.
Of the current 7.25 percent sale tax — the lowest in the state for cities of Bakersfield size or larger — the city gets just 1 percent.
Its income from that single source fell from $72.4 million in the 2013-14 fiscal year to $65.3 million this year, an almost 10 percent drop attributed primarily to less spending by oil producers in the face of drastically lower barrel prices since 2014.
The city has tried to make the case it’s running lean and needs more revenue. Tandy and his staff emphasize raises for city staff have been all but eliminated, while the city has slashed its budget by $15 million during the past three years.
By City Hall’s projections, increasing the sales tax by 1 percentage point, as proposed, would generate $50 million per year.
Materials provided by the city state the top priority when spending money from the sales tax increase would be maintaining and enhancing public safety staffing and resources. The idea would be to improve police response times, boost patrol visibility in an effort to deter property and other crimes, crack down on gang violence and do more to prevent and investigate property crimes.
The second-highest stated priority would be to address the city’s long-term fiscal stability by shoring up unfunded pensions and taking other steps to deal with financial liabilities. Third on the priority list: quality of life programs and services, like doing more to reduce homelessness and maintain parks.
Talk of raising taxes has turned attention to the city’s broader efforts to improve the local economy, which theoretically would boost sales tax revenues without the need to adjust the city’s sales tax rate.
Tandy pointed to several initiatives in that regard. He noted three large real estate projects in different stages of development. There has also been substantial investment in road and other infrastructure work, as well as renewed efforts to attract new businesses to the city.
Despite these efforts, some argue more should be done to diversify the local economy and otherwise promote local investment that would help fill city coffers.
While Tandy agrees with the need for greater focus on economic development, he said certain programs designed to lure enhancement have been put on hold temporarily because of the city’s tight budget situation.
The Greater Bakersfield Chamber of Commerce is somewhat torn on whether to support the tax increase.
President and CEO Nick Ortiz said in a written statement that although the chamber has historically been fiscally conservative, it is concerned about the potential for erosion in Bakersfield’s quality of life and public safety.
As details in the city’s sales tax proposal evolve, he wrote, the chamber is open to continuing to engage with city leadership on how to proceed. Meanwhile, he called for keeping a focus on economic development and widening Bakersfield’s tax base as a way of solving the city’s budgetary struggles.
He predicted the city and chamber members will continue to work together to identify areas of efficiencies and savings.
As he recalled telling city officials before, “revenue alone will not solve the City’s structural budget issues.”