For the second time this month, Folsom City Council Chambers were well populated Tuesday night as members of the community turned out for the final meeting of the month, the majority of them interested in the much talked about agenda item surrounding a potential sales tax increase in the City of Folsom’s future.
After nearly two dozen speakers took the floor to share their thoughts on the topic, the lengthy meeting ended with Council requesting city staff to move forward with the process to “bring back” the language of the proposed increase that could potentially be presented voters for their review and further discussion as to whether or not to proceed with it hitting the ballot in 2024.
If the measure were to be approved and officially placed on a ballot and passed by voters next year, a one-percent increase in tax revenue would generate an estimated $22 million per year in additional revenue based on data prepared by city staff, which laid out the shortfalls the city will face ahead.
Tuesday’s vote requested that city staff present councilmembers with the language for a general sales tax measure and a special tax, Council requested that the needed language and updates from the 2022 version of the proposed ballot item by January 2024 for review.
Through various budget, strategic planning, special meetings and workshops prior to Tuesday’s meeting, Folsom’s City Manager and Chief Financial Officer have presented City Council with information regarding changes in the historical, predictable pattern of the city’s sales tax revenue rate of growth in comparison to the rising costs, including that of employee compensation and benefits. There has also been much concern regarding the city’s overall reserves compared to that of other jurisdictions.
The concerns included the city’s financial ability to set money aside and respond to long-deferred construction and maintenance needs for the city’s facilities, including parks, trails and infrastructure, staff needs, and more over a five year period ahead.
City staff initiated and completed a comprehensive community outreach effort on these subjects in 2022; engagement from the community was rated as remarkably high compared to other jurisdictions by the expert consultants engaged in that effort at the time.
City staff originally presented the proposed ballot language for a local sales tax measure to the City Council at its July 12, 2022 regular meeting for consideration for placement on the ballot of the November,2022 General Election. The City Council declined to place the language on the ballot at that time.
According to city provided data, Folsom’s cumulative tax rate on retail sales currently stands at the base rate of 7.25 percent of the purchase price, plus an additional .5 percent for Measure A transportation uses, for a total of 7 .75 percent of purchase price. However, the City of Folsom does not receive .75 percent of the purchase price from each sale within Folsom.
Instead, that tax revenue is allocated between the State of California, the County of Sacramento, the City of Folsom, and other public agencies. Folsom’s share is 1.0 percent of the purchase price. This means that if someone makes a one dollar purchase in Folsom, the City of Folsom receives one cent (not7.75 cents) from that transaction.
According to the analysis, if voters were to approve a local sales tax measure, 100 percent of the revenue from that measure would go to the City of Folsom; that is to say, the revenue would not be shared with other agencies.
The data revealed that a successful sales tax measure raising Folsom’s rate by one-half percent would increase the cumulative tax rate in Folsom to 8.25Yo, and Folsom’s share of the purchase price would increase from 1.0 percent to 1.5 percent. A successful sales tax measure raising Folsom’s rate by one percent would increase the cumulative tax rate in Folsom to 8.75 percent, and Folsom’s share of the purchase price would increase from 1.0 percent to 2.0 percent.
The data noted that. “traditional” estimates show that about 40 percent of sales tax is paid by non-residents.”
In comparison with neighboring communities in Sacramento County, the Cities of Elk Grove (8.75 percent), Galt (9.25 percent), Rancho Cordova (8.75 percent), and Sacramento (8.75 percent) all have at least a one percent local sales tax in place. The City of Citrus Heights remains at 7.75 percent alongside Folsom’
$35,000 grant for Folsom Police approved
When it comes to a tax measure, police and crime is often part of the discussion. In other business related to policd Tuesday an agenda item included the approval of a $35,000 federal grant from the Department of Alcoholic Beverage Control’s grant program. The funds help police combat underage drinking with undercover ABC sting operations.
The grant funds will help Folsom Police combat the costs of overtime and operations associated with operations to combat the ongoing issue of underage drinking in the city and the overtime costs incurred with the protest that has proven successful in the past.