Sales tax increase to be declared, vacancy tax to be discussed
After receiving a preliminary go-ahead from voters in a special election last month, official word for a key ballot measure bound to increase sales tax within the city of Pacific Grove by half a cent is set to cycle through the Pacific Grove City Council at its regular meeting tonight.
Backed by certification from the Monterey County Elections Department, the city council's announcement will declare Measure A approved by Pacific Grove voters at a margin of about 60% to 40%. Measure A is a continuation of the city's OK'd but subsequently blocked Measure L tax increase of 2020.
The city will now work with the California Department of Tax and Fee Administration to prepare and administer Measure A. Due to implementation timelines, the half-cent tax bump will become effective in October 2022, according to city documents.
Once in place, Measure A is estimated to generate the city around $1.1 million in additional annual revenue. Even with an implementation date set for the fall, approximately three-quarters of the tax's initial annual revenues will apply to the city's 2022-23 fiscal year, which begins in July. Tax fees will be deducted from corresponding revenues, though the city has noted fees associated with tax preparation are anticipated to be less than $40,000, with ongoing costs expected to account for just over 1% of Measure A revenues.
The half-cent increase will bring Pacific Grove's 8.75% sales tax up to par with most other cities along the Monterey Peninsula, whose rates currently stand at 9.25%. Only Sand City remains at 8.75%.
“The city's pleased that voters decided to pass the sales tax again,” Pacific Grove City Manager Ben Harvey said last month. “This places us at the same tax level as all the other cities in the region, and it will yield (additional revenue) important for lifting infrastructure and programs.”
Satisfied with the half-cent tax increase moving forward, the city is already starting to look ahead.
On the heels of declaring election results tonight, the Pacific Grove City Council is scheduled to discuss a potential ballot measure for a proposed commercial district vacancy tax. Motivated by the increasing number of vacant storefronts in Pacific Grove's downtown, the measure would impose a tax on retail property owners in possession of storefronts va
cant for more than 182 days total (consecutive, non-consecutive, or otherwise) per calendar year, according to city documents.
The idea — first brought to the city's Economic Development Commission in February — is inspired by a similar measure approved by voters in the city and county of San Francisco two years ago.
A staff report prepared for tonight's meeting notes that the “purpose of a vacancy tax is to stimulate the rehabilitation of long-term retail vacancies and reinvigorate commercial corridors and stabilize commercial rents, thereby allowing new small businesses to open and existing small businesses to thrive.”
The Pacific Grove City Council is considering whether or not to appoint a subcommittee that would explore the potential tax further. The city council would need to take action by July/August to have the proposed ballot measure included within the November general election.
Tonight's Pacific Grove's regular city council meeting will begin at 6. The meeting can be accessed both in person at the Pacific Grove City Council chambers, 300 Forest Ave., or online at https://us02web.zoom. us/j/209579290. Chamber capacity is limited to 50 people and is provided on a first-come, first-served basis.