CITRUS HEIGHTS, CA (MPG) - At the July 23 meeting, the Citrus Heights City Council considered a resolution to submit a transactions and use tax measure to voters in the November 3, 2020, election. The language in the measure says the funds would be used “to protect local control with funding that cannot be taken by the State” and would be spent on maintaining vital city services such as emergency response and preparedness, public safety, homelessness prevention, and supporting local businesses and job creation.

City staff estimate that the one-cent sales tax would generate $12,000,000 in annual revenue. The expenditure of the funds would be monitored by a Citizens’ Oversight Committee, and annual audits by an independent accounting firm would be posted to the City’s website. The sales tax measure does not include an end to the tax, just stating it would be implemented “until ended by voters,” which would require a future ballot measure to repeal the tax.

Staff explained that the City has known since incorporation that there would come a time when expenditures would exceed income due to the Revenue Neutrality agreement with Sacramento County, which allowed the county to keep Citrus Heights property tax revenue for 25 years. Under this agreement, Citrus Heights won’t receive property taxes until January 2023. To make up for this anticipated budget shortfall, staff have implemented various cost-saving measures, which City Manager Chris Boyd said resulted in savings of $1 million in 2019.

But with the economic impact of the COVID-19 public health crisis, the City is facing an even more drastic and unexpected loss of revenue. Citrus Heights has been left out of all the federal pandemic relief packages, and the state has its own deficit to deal with. So, City Manager Boyd said Citrus Heights must overcome these challenges on its own.

With a limited budget, the City knew expenditures needed to align with community needs. So, last year the City Council asked staff to identify community priorities through an extensive public engagement process. Citrus Heights Economic Development and Communications Manager Meghan Huber said based on surveys of thousands of residents, community members view public safety, improved infrastructure, and fiscal stability as high priorities.

To explain the importance of public safety, Citrus Heights Police Chief Ron Lawrence touted his department’s record of addressing homelessness and reducing crime in the city. But he said the current funding levels are “not sustainable. … We simply cannot maintain high-quality service on a long-term basis without adequate funding.” Chief Lawrence cited various programs that have already been suspended due to lack of staff and resources.

Regina Cave, operations manager of the General Services Department, spoke to the Council about the state of Citrus Heights’ infrastructure, explaining that the city’s roads are in dire need of investment, and the current funding levels are not sufficient. Cave explained that unless improvements are undertaken, roadway conditions will worsen while the costs of deferred maintenance will compound annually, costing the City more in the long-term.

EMC Research, a third-party scientific research and polling firm, conducted telephone surveys in June 2020 to gauge residents’ level of support for a possible sales tax measure. They presented their findings to the Council, stating that up to 71% of respondents (with a margin of error of 4.88%) would support a measure to increase local control and maintain essential services.

EMC’s data are based on responses from 404 residents, which is just 0.5% out of a total population of approximately 88,000.

Members of the public called in to the meeting or submitted comments to share their views on a proposed sales tax — half in favor of the measure and half opposed. Those in favor stated that the tax is necessary to continue the quality of life and level of service they expect as residents of Citrus Heights. Bill Van Duker said, “If we want to thrive going forward, we have to do it ourselves. … We’re at a crossroads. We can either cut and struggle, or we can give our city the resources to do the things that will help us excel.”

Albert Fox said he supports the measure because it would fund projects that will improve the city: “We collect it, we control it, and we determine its use.”

The residents who spoke in opposition to the measure argued that it was not the right time to impose a tax when many residents are already struggling due to COVID-19 shutdowns. Bruce Lee, president of the Sacramento Taxpayers Association, said the measure is a regressive tax that would hurt low-income communities.

Joseph Solinsky stated, “Austerity is the better tool to address budget shortfalls when people are unemployed, not the hardship of additional expense.” He suggested implementing cost-saving measures such as delaying wage increases, city improvements, and capital expenditures.

Councilmember Bret Daniels acknowledged that the City has made an effort at cost containment but said more must be done, expressing concern that the tax would hurt local businesses and residents already struggling during a difficult time. Councilmember Daniels also said he doesn’t believe the measure would pass if put on the ballot, so he can’t support it at this time.

Councilmember Jeannie Bruins supported the measure, citing data from the community surveys: “Our public is telling us what they want. Our public is telling us that they would support the funding to do this.” She said, “These increased revenues are essential.”

Councilmember Steve Miller said, “I believe this measure, if passed, will be a catalyst and a sound investment by our citizens to move our city to the next level. It will allow us not to just survive, but to thrive.”

Councilmember Porsche Middleton agreed: “We have an opportunity in front of us to kind of rewrite our destiny and our future — a future where we’re not limited or dependent upon funding outside of our community.”

Mayor Jeff Slowey supported putting the measure on the ballot: “I think it’s right for the people to decide.”

The resolution passed 4-1, with Councilmember Daniels dissenting, so the proposed sales tax measure will be put to the voters this November.