Support wanes for sales tax

The Scotts Valley City Council decided against asking voters to renew a quarter-cent sales tax, saying that the trust of the community is more important than extending the tax during an unyielding down economy.
At a meeting Wednesday, May 5, Councilwoman Stephany Aguilar asked the other council members to consider placing an extension of Measure C — a five-year sales tax approved by voters in 2005 that will expire in March 2011 — on the November ballot.
With pending police cuts and the economy showing signs of a slow recovery, Aguilar said the decision should be left to voters whether to extend the existing quarter-cent sales tax to keep law enforcement sturdy and city revenues healthy.
“Measure C was supposed to be a bridge to the future, but the bridge hasn’t been built yet,” Aguilar said. “I want to maintain the integrity of the community and the well-being of the community.”
Aguilar said the decision of whether to renew Measure C should be left to the voters on the November ballot.
“I’m more concerned about the community’s well-being than my political well-being. I think asking the question is fair, and the voters should make that decision,” Aguilar said.
Aguilar said that extending Measure C could bring in more money being taken by the state, as well pay for parks and recreation and police, which might suffer when the sales tax expires.
But Aguilar’s request was thwarted by a 4-1 vote by the other council members, who said they had promised voters the tax would expire after five years and didn’t want to go back on their word.
Mayor Jim Reed, who supported the tax in 2005, before he was a member of the council, said the city can stay afloat during tough times with its reserves, and if voters want to bring the issue to the November ballot, they can do it without the council.
Measure C has helped the city build up more than $2 million in reserves. The city’s reserves were at about $400,000 when the measure passed.
“We made it clear that this was not a permanent tax,” Reed said. “This is going back, figuratively, on a promise.”
Councilman Randy Johnson commended Aguilar for opening up the issue to discussion but said he opposed renewing the tax.
“It’s important to maintain trust and credibility, first and foremost,” Johnson said.
Timing was important, as the measure would have to be placed on the ballot before Aug. 6, or the extension would not take effect before the tax expires in March.
Measure C added an extra half-percent sales tax for the first three years after its approval. The tax dropped to ¼ percent in 2009 for the remaining two years.
At its peak, the measure raised about $1 million annually, and it most recently provided about $500,000 of Scotts Valley’s $8.2 million budget.
When first proposed, Measure C was touted as a “bridge to the future” to close an $800,000 budget gap, offer police competitive salaries and strengthen the city’s reserve funds.
Initially, city leaders had banked on replacing Measure C money with revenue from the much-anticipated Town Center. But, due to economic woes, the center is still in the early planning stages as developers and businesses hesitate to set up shop.
Scotts Valley has the second highest sales tax in the county at 9¼ percent. The city of Santa Cruz is highest at 9½ percent.
Scotts Valley Vice Mayor Dene Bustichi agreed that the city does not need to renew the measure, as it has 10 times the surplus it had in 2004.
“We’re not there yet. We don’t need to go to the voters and ask for it. I think we’ve got a good base to get us through this rough economy,” Bustichi said. “Rough years is not a reason to ask taxpayers for more money.”