Cities Scramble To Place Tax Measures On Ballot For This November

As the COVID-19 crisis is contracting the economy at the national, state and local levels, seven municipalities in San Bernardino County are seeking permission from their cities’ or town’s residents consent to layer further taxes upon them.
The need for income to subsidize flagging government operations is so great, those local officials maintain, that those jurisdictions’ citizens, who are equally financially challenged themselves by the sputtering economy, should be willing to chip in even more than they are already paying to keep government at all levels viable to ensure that local governmental control is not compromised.
Chino Hills and Redlands have already qualified their tax proposal votes for the November election.
Adelanto, San Bernardino and Victorville have requests for the San Bernardino County Registrar of Voters to expand the ballot to include their taxing proposals. And on Monday, July 27 and Tuesday July 28, the Upland City Council and Apple Valley Town Council in last-ditch efforts will, respectively, attempt to come to a consensus about whether they should begin the application process to get a tax measure for Upland and the Town of Apple Valley on the ballot by the deadline to do so.
The ballot proposition that is to be submitted directly to Chino Hills’ voters calls for the municipal code to expand the definition of “hotel” for purposes of the city’s transient occupancy tax, known as the hotel or bed tax, and to increase the current transient occupancy tax rate from 10 percent to 12 percent, effective January 1, 2021, subject to the approval of a majority of the electors voting on the tax measure at the general municipal election to be held on Tuesday, November 3, 2020.
Chino Hills’ proposed transient occupancy tax applies to hotels and motels and the use of any residential dwelling, or portion thereof, for transient lodging purposes. The proposition calls for a definition of ”hotel” that means “any structure or facility, or any portion of any structure or facility, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, motel, inn, tourist home or house, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, campground or other similar structure or facility, or portion thereof, wherein overnight accommodations are offered for hire.”
The City of Redlands’ submitted ballot proposition calls for adding Chapter 3.18 to the Redlands Municipal Code to enact a one percent transactions and use tax – in common parlance referred to as a sales tax – to the cost paid for goods and services in the city, which is to be administered by the California Department of Tax and Fee Administration.
The Redlands taxing proposal appears to be somewhat problematic in that the document approved by the city council and sent to the registrar of voters office provides an “exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property,” while laying out no such exemption for prescription drugs or food, which are both exempt under California’s tax code. Furthermore, the language “exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property” defied interpretation by virtually every tax lawyer the Sentinel consulted in seeking to discern its meaning.
This week the Adelanto City Council voted to have the Registrar of Voters place on the November ballot at the general consolidated election on November 3, 2020 a proposal to adopt an initiative ordinance establishing a special tax on vacant properties to fund solutions for parks and recreation, illegal dumping remediation, public safety, capital improvement projects, and specified programs.
If passed, the Adelanto tax would levy on vacant parcels a fee based upon the zoning of each particular parcel ranging from $50 to $600 per acre. Property owned by nonprofit corporations is exempted.
The measure calls for setting a tax of $200 per acre within the city’s airport development district and its airport park; $600 per acre in the city’s business park area; $600 per acre on commercial property; $50 per acre on property zoned for desert living, i.e., residential use; $600 per acre for land zoned for light manufacturing; $600 per acre for land zoned for manufacturing/industrial use; $500 per acre for land zoned for mixed use; $50 per acre for land zoned as open space; no charge for land designated for public utility use; $300 per acre for land designated for development as single family residential homes; $400 per acre for land zoned for medium density residential development; $300 per acre for land designated for high density residential use; and $200 per acre for properties without any fixed zoning.
On July 21, the Victorville City Council voted 4-to 1, with Councilwoman Blanca Gomez dissenting, to place a measure on the November ballot that would raise the sales tax in the city another one percent, from the current 7.75% to 8.75%.
City officials maintain the measure, if passed, would net the city another $15 million annually, which will be placed in the city’s general fund to cover ongoing and future operating fund shortages.
In June, the Montclair City Council voted to put before the voters of that city a one percent sales tax increase proposal in November. If passed, the sales tax levied upon purchases in Montclair would rise from the 8 percent collected now to 9 percent.
As it now stands, goods purchased in Montclair are subject to the state’s 7.25% rate, an existing 0.25 percent city tax, and another half cent countywide transportation tax.
If passed, the combination of Montclair’s sales taxes would amount to 1.25%.
In San Bernardino, a 0.25 percent sales tax has been in place since the passage of Measure Z in 2007. The proceeds from the Measure Z tax are earmarked exclusively for public safety. The Measure Z tax is set to sunset in 2022. Over the years, Measure Z has provided San Bernardino with more than $91 million in augmentation funds for public safety.
Attempting to get ahead of the curve and at the same time redress a pattern of deficit spending that has depleted the reserves that San Bernardino was able to salt away between 2012 and 2017 when it was functioning under Chapter 9 bankruptcy protection, the city council has requested that the San Bernardino County Registrar of Voters put a Measure on the November 3 ballot that would extend the Measure Z tax, presumably for another 15 years, as well as impose another 0.75 percent tax on top of that, providing the city with a one percent sales tax that would go into effect as of April 2021. The total sales tax in San Bernardino would then become 8.75 percent per year. The addition 0.75 percent sales tax would translate into $27 million in additional revenue to the city per year, according to projections.
At its meeting scheduled for next Monday, July 27, the Upland City Council is to consider city staff’s recommendation that it approve submitting to the San Bernardino County Registrar of Voters a request that the November 3 ballot feature what was labeled “a one percent Local Recovery and Essential Services Tax Measure.”
In the staff report for the item, Stephen Parker, Upland’s assistant city manager, and Steven Flower, Upland’s city attorney, described the Local Recovery and Essential Services Tax as “a transaction and use (sales) tax.” Parker and Flowers said the tax would “until ended by voters, provide a source of locally controlled funding to prevent further cuts and support local services residents value, using funding the state cannot legally take.”
At its meeting scheduled for next Tuesday, July 28, the Apple Valley Town Council is to consider requesting a measure be placed before town voters on the November 3, 2020 general election ballot asking them to approve a one percent sales tax. Town officials say the money generated by such a tax will further fund community services, and shore up financing for infrastructure, and will fatten the town’s reserves.
The town predicts the sales tax measure would generate approximately $7 million annually off sales within the town limits.
An element absent from virtually all of the documents generated by the cities and the Town of Apple Valley relating to the proposed taxes was disclosure of when, or if, the taxes would “sunset,” that is end. Nor was there any discussion given with regard to what process city residents or those in the Town of Apple Valley could use if they wished to rescind the taxes if they were to be approved.
-Mark Gutglueck

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