City Council Moves Forward With Sales Tax Proposal

The approved the wording and specifics of a proposed half-cent sales tax on Monday, and voted 4-0 in favor of drafting a resolution to put that tax measure on the November ballot.

( was not in attendance.)

Once that resolution is written, the council is scheduled to vote on whether to approve it during a meeting in July.

The proposed sales tax, which would last eight years and is estimated to generate about $600,000 each year, comes in response to declining revenues, which have forced city leaders to consider cutting certain city services.

According to a staff report, the funds from the sales tax will not be earmarked for specific purposes. If they were, the tax measure would need to garner a two-thirds majority vote rather than a simple majority, lessening its chances of passing.

As it stands, the wording of the ballot will ask voters to decide on a half-cent sales tax "to preserve the quality of life and maintain critical city services and facilities," including maintaining police and fire services, along with recreational, senior and youth programs.

Following state sales and use tax standards, Albany’s proposed tax would apply to any retail sale, with exceptions on certain classes of items such as unprepared foods, health services and utilities.

During public comment, Albany resident voiced reluctant approval of the tax increase, which she said she sees as a financial necessity considering the city’s fiscal state.

“I would not at all support this if we hadn’t just had the discussion about the city budget,” O’Keefe said. “I would really ask that, to the greatest extent possible, especially with your limited staff, that council exercise its policy opportunities to find other ways to raise revenues for the city.”

There was little discussion among council members about the tax proposal, but did voice a preference for a tax increase that would last longer than eight years.

“I’d love Albany to be in a situation where we can do long-term planning, and this would just be something that we have, but it may not be the best way to go,” Lieber said.

said the eight-year duration, along with the ballot wording, were determined after consideration of conducted earlier this year by Godbe Research.

According to the study’s findings, which were presented to the council in April, a majority of polled voters said they would support the half-cent sales tax, with 56 percent saying they would definitely vote yes and 24 percent saying they would probably vote yes. (See Godbe's report on the survey attached to this story as a PDF.)

The study also showed that a majority of those polled would support the tax, no matter if it lasted five, 10 or 15 years, though support lessened for the longer durations.

But, according to Pollard, eight years was chosen because it is a length of time many people can accept, because it coincides with political office terms.

Due to a state law that limits local sales tax measures to a total of two cents, the proposed sales tax for Albany can be, at most, a half-cent. 

Currently, the sales tax rate in Albany is 8.75 percent. Assuming the proposed tax increase goes to vote in November and passes, the new sales tax rate will be 9.25 percent, beginning April 1, 2013. 

In elections earlier this month, according to a document included in Monday night's council packet, nine California cities voted on new sales tax measures that are set to last between four and nine years. The measures all passed except for one in the city of Alameda, which was earmarked for a specific purpose and did not make the required two-thirds majority.

According to the report, via CaliforniaCityFinance.com regarding the June 2012 elections, "The high passage rate for sales tax measures in this election exceeds that of previous elections. Since 2001, about 60% of measures to increase general purpose (majority vote) local sales taxes passed. Just 36% of two-thirds vote special sales tax increases passed during that time."

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If there's something in this article you think , or if something else is amiss, call editor Emilie Raguso at 510-459-8325 or email at albany@patch.com.