Cathedral City voters will consider sales tax hike in November

A measure proposing to raise Cathedral City’s sales tax by half a cent per dollar will be on residents’ ballots this fall.

On Wednesday, the city council unanimously approved putting the decision to voters in November. Increasing the tax rate by 0.5% would raise $5 million annually and be used to pay for city services like maintaining emergency response, repairing streets and natural disaster preparation.

The cities of Palm Desert and Desert Hot Springs will have larger 1% sales tax measures on their ballots. The Riverside County Transportation Commission considered putting a 1% countywide bump in the sales tax on the ballot to fund transportation projects, but ultimately decided against it for this year.

Mayor Mark Carnevale said Cathedral City has done so much with so little for a long time. He said $5 million actually won’t be much money and the city needs more funding, but that more revenue will come as more people and businesses move to the city.

“So starting now with $5 million, this is going to grow … it’s not going to happen the first year, but we’re on the right track and this council here is very good stewards of taxpayer’s money,” he said.

The sales tax in Cathedral City is currently 8.75%, which includes the 7.25% statewide sales tax, 0.5% county tax and 1% city tax. If the measure is approved, Cathedral City’s sales tax would become 9.25%, tying Palm Springs for the highest rate in Riverside County.

If voters in Palm Desert and Desert Hot Springs approve the increases, the rate in each city will be 8.75%. Palm Springs voters will not consider a tax increase this fall, but they will consider a measure that would effectively make the existing 1% Measure J tax permanent; it's currently scheduled to end in 2037.

A failed measure’s role

This won’t be the first time in recent history Cathedral City voters decide whether they want a tax increase.

In 2022, Measure K proposed taxing property owners in order to fund joining the Desert Recreation District for parks and recreation services. The city does not have its own parks and recreation department.

It failed despite having 55% of votes in favor. Measure K required a two-thirds majority vote in order to pass since it was a single-purpose tax measure.

But due to the community’s support, the city went on to consider how else to provide parks and recreation services. The council adopted an action item in the city’s five-year strategic plan in April 2023 to “develop a plan to address the need for funding for parks and recreation services through the DRD; and other resident priorities including streets, and work toward a potential funding measure in 2024,” according to a city staff report.

A committee of residents, which City Manager Charlie McClendon appointed, considered the city’s unfunded needs and made a recommendation to the council for a general purpose half-cent sales tax after several meetings. The council directed city staff to poll the community to see if a half-cent sales tax measure would pass.

Surveying residents

In March, FM3, a professional survey research firm, polled 433 residents likely to vote this November and almost three-quarters of them believe Cathedral City requires more funding, according to the city staff report. The survey, conducted via telephone, text and email, included possible ballot language and funding priorities. Cathedral City's contract with FM3 cost $42,500.

The highest priorities in the survey were “maintaining 9-1-1 medical emergency ambulance, fire and police response” and “maintaining fire protection and paramedic services,” with 93% of respondents ranking both as extremely or very important.

Cathedral City also created a web page called “Join the Conversation” so residents could share their priorities by taking an online survey . A mailer was sent out to residents asking them to participate and 197 people had done so as of Wednesday.

In the online survey, “recruiting and retaining well-trained paramedics and firefighters” was the item most commonly labeled important, with 47.4% of respondents ranking it as their top priority.

In a statement this week, McClendon said the new revenue would help the city deal with the loss of $30 million in state funding over the past five years. That's a point the city also stressed in the mailers it sent out asking residents to take the survey.

What will the ballot say?

The ballot will read as follows, according to the city staff report:

• “Shall the measure providing funding for Cathedral City’s general services such as maintaining 911 medical emergency/ambulance/fire/police response and gang prevention programs; recruiting/retaining well-trained paramedics/firefighters; repairing streets/potholes; preparing for/responding to and recovering from rainstorms/natural disasters; keeping public areas/parks safe/clean; addressing homelessness; by increasing sales tax by ½¢ providing $5,000,000 annually until ended by voters; requiring audits, spending disclosure, funds locally controlled, be adopted?”

What revenues would fund

The half-cent sales tax increase would raise around the same revenue as Measure K would have if it passed at $5 million a year. The city council will have final say on how the money is spent, but the resident committee suggested that the sales tax revenue be used to fund the following:

• Annexing into the DRD so it can provide parks and recreation services
• A community recreation center
• Adding $1 million annually for street maintenance
• Adding a two-person medical response ambulance to the Cathedral City Fire Department’s three shifts, which would mean six new staffers

Ani Gasparyan covers the western Coachella Valley cities of Desert Hot Springs and Cathedral City. Reach her at ani.gasparyan@desertsun.com.

This article originally appeared on Palm Springs Desert Sun: Cathedral City voters will consider sales tax hike in November