Officials mulling tax measures for November ballot

City hopes to make up for coming revenue drop after parcel tax failed

UNIONCITY>> With voters rejecting a public safety parcel tax in March, Union City officials are now considering placing one of two possible tax measures on the November ballot to generate millions of dollars annually for the cash-strapped city, including a sales tax measure that would require special clearance from the state.

Even though Union City is at the sales tax limit allowed by law, the City Council at its meeting tonight will decide whether to have staff work up the ballot language for a onecent sales tax measure, as well as a utility users tax measure.

If the council ultimately wants to place either on the Nov. 3 ballot, it needs to decide by its July 28 meeting in order to meet a county registrar deadline, according to Deputy City Manager Mark Evanoff.

For the potential sales tax, the city would be asking voters to create a new, one-cent sales tax that would last eight years and raise an estimated $11 million annually, which could be spent on any city services the council decides, such as police and fire, street repair or support for older adults like meal programs.

Voters would have to approve extending an active halfcent sales tax for another four years, and adding a new halfcent sale tax for eight years. The measure would need to have a simple majority — more than 50% of voters — supporting it to pass.

Because the city has hit its legal sales tax limit of 9.75%, city staff reports said special legislation and Gov. Gavin Newsom’s signature would be required to allow the city to exceed the cap, presuming it would pass.

Assembly member Bill Quirk has “offered to carry special legislation authorizing cities to increase the cap on sales taxes,” city reports said, but noted that Newsom “has not been support

ive of cities raising the cap on sales tax in prior years.”

City reports said Quirk’s office is reaching out to the governor’s office, “to get a read if the governor would be supportive of signing legislation allowing cities to place a sales tax measure on the ballot.”

If there isn’t support from Newsom’s office, the city could choose to place a utilities user tax on the ballot instead, which Evanoff called a “backup measure.” Evanoff said the utility tax would tax residents 3.5% on all their current utility bills, including power, water, sewer and telecommunications services, for eight years.

That tax would raise about $4.7 million annually, according to city report, and would also need a simple majority to pass.

The city, which was already facing an annual budget deficit of about $3.5 million before the coronavirus pandemic hit, asked local voters to slightly increase the amount of a public safety parcel tax and extend it by eight years in March.

The tax was first approved

by voters in 2004 and had been renewed three times since up to that point, but it failed earlier this year to get the necessary two-thirds approval needed to pass.

It currently raises about $4.3 million annually to help pay for police and fire services, and funds a program focused on gang intervention called Youth and Family Services. The current tax will expire in June 2021, and the city is scrambling to make up for the lost revenue, hoping to avoid having to make deeper cuts to the city’s budget.

“If people want to continue receiving services, there is a need for a new tax to replace the one that is expiring, and that’s what we’re asking the voters to support, and it’s really up to them,” Evanoff said Monday in an interview.

“It’s good democracy to allow voters the opportunity to fund services in their respective cities.”

Though the city’s financial troubles started long before the coronavirus pandemic, Evanoff said COVID-19 is also forcing the city to take a hard look at its budget in the coming months, “and the expiration of the public safety parcel tax is an additional challenge.”