Voters in Yuba City will decide at the ballot box in November whether to add an additional 1% sales tax within city limits to address the city’s budget crunch, funding overdue road repairs and public safety expansion.
Although many in the community recognize the need to address damaged roads before their condition worsens, area voters shot down a similar tax two years ago.
The upcoming vote on Measure D follows an unsuccessful bid last election cycle by Sutter County officials, who pushed for a county-wide penny tax that failed by a narrow margin.
The proposed tax is expected to raise about $17.5 million annually, which would primarily go toward dealing with years of underfunded maintenance on city roads as well as investments in law enforcement, addressing homelessness and funding upgrades for the fire department.
City and county officials have reached an unorthodox deal to share the 1% revenue if the vote passes. Under their agreement, the city would claim two thirds of the expected income and the county would take the remaining third, with the purpose of funding projects and services that benefit both the city and county.
“Our understanding is this is extremely unusual for a city to propose to share revenue proceeds with the county,” said Diana Langley, city manager for Yuba City.
With a current sales tax of 7.25%, Yuba City is one of eight California cities at that state-minimum threshold, according to city officials. The extra penny would bring the city on par with neighboring Marysville and Yuba County , which each carry an 8.25% sales tax.
If the vote passes, Sutter County’s 7.25% rate would still apply to in-county transactions made outside the city.
Currently, Yuba City peels 1% from sales tax collections, with 4% going toward the state general fund and most of the remaining 2.25% to the county. Sales tax, along with property tax, is a major contributor to the city’s budget, which officials said has been hit, like consumers’ budgets, by inflation.
Yuba City Council members endorsed the new sales tax at their regular meeting this week, a show of support for the measure they previously voted to put on ballots. A similar 1-cent sales tax pitched by Sutter County officials failed narrowly during the November 2022 election , with more than 48% of voters in favor, shy of the majority needed.
How the tax works
Splitting the sales tax, based on current projections, would leave the city with about $11.7 million and the county with shy of $5.8 million each year. Any collections above the estimated $17.5 million would be split 50-50, with half going to the city and the other half into a joint project fund shared with the county, according to an agreement council members approved earlier this month.
“The funds are to go toward things that benefit Yuba City residents, which are also Sutter County residents,” Langley said.
In future years, the baseline tax amount shared by the city and county would default to the collection amount the year before. For example, that threshold starts at $17.5 million, but if $20 million is collected in the first year, the two-thirds amount the city takeswill be from up to $20 million total in the second year.
As a general sales tax, it does not come with a designated purpose and requires a simple majority to pass. A special sales tax requested for a specific purpose, with a fixed timeline, requires two thirds of the vote.
However, city officials have identified where they plan to put those dollars should they come to collect them.
To pay for the desired projects, and effectively ensure the direction of the new funds, city officials said they plan to issue bonds of $50 million for major road projects and $20 million for a new fire station. That would fast-track the improvements with upfront funding paid back over time with interest to debt holders.
To stay in bounds of the general sales tax requirements, the actual revenue split between the city and county would come from the Bradley Burns Sales Tax, which is the 1% the city already receives from sales tax, Langley said.
“We want to be very careful that we’re staying in the guidelines for a general sales tax measure,” she added.
What the city wants
Years of underfunded road maintenance have put road repairs as the priciest expense the city hopes to address with the added sales tax revenue.
“There’s $150 million backlog of road rehab that needs to be done,” Langley said at a Sutter County Taxpayers Association meeting this week.
If the vote passes, city officials want extensive repairs of major roads throughout Yuba City .
But a significant chunk would also go toward public safety concerns.
City officials said they would expand police services to Walton and Happy Park residents, an area on the southwest side of Yuba City which the Sheriff’s Office, a county agency, currently serves. Police would also hire workers and create a “Clean Team” to address homelessness.
Yuba City Fire Chief Jesse Alexander said the fire department would seek a new fire engine, which costs about $900,000, to meet the growing number of calls the department receives. That could take up to four years to receive from the time it’s ordered, he said.
City officials also may seek a $20 million bond to replace the main fire station and house the new fire engine.
City Council members said they explored other options before deciding to seek the added tax revenue and finance the city’s most pressing projects.
“We are to bones,” Councilman Michael Pasquale said at a Sutter County Taxpayers Association meeting this week.
“There is no meat on the bone here,” he added.
For and against
Some Sutter County and Yuba City residents pushed back on the city’s tax request prior to the City Council’s endorsement.
A small group of attendees at a Sutter County Taxpayers Association meeting on Monday questioned city officials on the need for the tax, how it would be used and the financing plan to pay for the desired repairs and services.
Yuba City resident Bijan Parhizgar, before council members endorsed the measure Tuesday, said the city should have asked voters to decide on a special tax, rather than a general tax, to ensure the length of the tax and its purpose.
“Citizens vote and put their trust in you to do the right things in the right way for the city, instead of calculating which options have a better chance of passing,” he said. “It brings you across as ‘we are short of funds and we will do whatever to get it.’”
Councilman Marc Boomgaarden said that there was a time he would not have wanted or proposed a new sales tax, but economic realities in recent years require council members to ask voters to help the city raise funds.
“Cities in California are under the gun with rising prices,” he said.
That sentiment was echoed by Mayor Shon Harris.
“In order to keep up services and enhance services and then to improve the quality of life, the quality of what we have going on in the city, it’s going to take money,” Harris said. “That’s the bottom line.”
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