Half-cent sales tax passing in Hercules; most others failing
Hercules voters were approving an emergency sales tax Tuesday intended to ease the financial struggles of the East Bay city as it hovers near bankruptcy.
Voters in San Mateo and Alameda counties were also being asked to approve tax measures that would help generate more revenue.
In Hercules, Measure O, a half-cent sales tax, would bring in an estimated $450,000 a year — not enough to offset the city’s long-term economic woes but enough to stanch some of the worst bleeding, city staff said.
“Our financial picture is not pretty, but this helps point us in the right direction. Baby steps,” said Mayor Dan Romero. “I think the voters believed us when we said this was a real fiscal emergency.”
Hercules has been among the Bay Area cities suffering most in the economic downturn, largely due to its handling of redevelopment funds during the real estate boom. In all, the city borrowed more than $135 million for redevelopment projects, many of which were never completed after the market crashed.
In perhaps the most extreme example, the city had to sell a four-story apartment building for $425,000 after spending more than $38 million on it.
As revenues plummeted, the City Council was forced to lay off 40 percent of the city staff, cut salaries by 15 percent and increase fees for residents. The Police Department was hit particularly hard: The number of officers dropped from 30 to 20, bringing staffing to 1995 levels, when the population was about a third of its current level.
Hercules’ finances caught the attention of state Controller John Chiang, who blasted the city in May for what he called “the worst set of city accounting records I have ever seen.” His office is continuing to investigate the city’s budget quagmires.
Hercules was not the only Bay Area jurisdiction to ask voters for a bailout. Cities, school districts, counties and special districts throughout the region asked for a slew of taxes and bond authorizations in order to avoid further cuts.
In San Mateo County, voters were narrowly approving
“Our financial picture is not pretty, but this helps point us in the right direction. Baby steps.”
Hercules Mayor Dan Romero
one and rejecting two tax measures aimed at businesses around San Francisco International Airport.
Measures T, U and X would tax parking lots, rental cars and hotels in hopes of raising $13 million, almost halving the county’s $28 million deficit. Measure T, a 2.5 percent tax on rental cars, was passing, while U and X, taxes on hotels and parking, respectively, were trailing.
The county has already eliminated 500 jobs and $70 million from its budget, with especially steep cuts to senior services, health clinics and drug rehabilitation programs.
San Francisco tourist groups fought the measures fiercely, saying the higher taxes would ultimately send visitors to cheaper airports, such as Oakland, San Jose and Sacramento.
“For some people this will be a tipping point, and they’ll just go somewhere else,” Joe D’Alessandro, president of San Francisco Travel, said last month.
In Alameda, a controversial sales tax intended to improve police, fire, library and recreation equipment was failing.
Measure C is a half-cent sales tax that would have raised the city’s overall sales tax rate to 9.25 percent, tied with Union City and El Cerrito for the highest in the East Bay.
Alameda has struggled since the Naval Air Station closed more than a decade ago. While real estate prices have remained relatively high, the city lost millions in fees and other Navy-related income when the base closed. Measure C would have raised an estimated $1.8 million annually, for 30 years, to help pay for a new fire station and emergency operations center, police and fire station upgrades, new police and fire vehicles, a new swimming pool and sports field, and library improvements.