A proposal to create a dedicated recreation trust fund will have long term consequences for city taxpayers, warned Kenneth Morris, councilman at-large, on Tuesday evening.
The measure which will be put on the ballot for voters’ approval this November if the city council approves seeks to collect five or six cents for every $100 of tax levy to annually raise $3 million that will be set in a trust fund for recreation.
Morris suggested city taxpayers could end up paying much more than what the resolution is attempting to collect at five or six cents per $100 of tax levy. He said under the city’s new tax rate, suggested by the appraisal company that recently completed a city wide property revaluation, a tax payer could end up in a tough spot.
The city’s current tax rate is 2.9-percent, but the suggested new rate is 4.2-percent. Morris said that 4.2-percent may not be enough to support the municipal budget and the actual rate may be around five-percent. “We’ve been having conversations that the rate may be closer to five-percent,” he said.
“It’s really difficult to determine what impact that will have when we don’t yet know what the rate is going to be,” said Morris. He reckoned an average home assessed at $350,000 at the lower end of the suggested rate of 4.27-percent will have to pay $14,945, but with the additional recreation tax it will be forced to pay $15,155.
An average property owner will end up paying an additional $210 in annual taxes. Morris used the six-cent per $100 of tax levy to calculate the numbers. He said the higher the tax rate the much bigger the impact on taxpayers.
Morris warned that when the new tax rate is put in place a taxpayer could be hit with a $3,000 tax increase.
“This makes it for me a very difficult to support this not knowing what rate we’re going to end up at,” he said.
The measure has to be approved in a popular vote which will likely happen as the measure has backing from popular state assemblyman Benjie Wimberly. The assemblyman and a large number of residents have urged the council to increase recreation spending which resulted in mayor Jose “Joey” Torres proposing the ballot measure.
“Many of those voters are not taxpayers,” said Morris. He said this ballot measure will more likely be supported by young people not taxpayers.
Both the mayor and the council have created the recreation commission which will be spending the $3 million or more collected through the dedicated levy modeled on the county open space tax.
The funds will be solely used to acquire and support recreational facilities and programs, said city officials.
Council members said they want more time to discuss the measure. A special meeting on August 5th, 2015 will be used determine whether the measure makes it to the general election ballot on November 3rd, 2015.