With a 5-0 vote on Monday night, July 15, members of the Escalon City Council approved placing a one percent sales tax measure on the November ballot. If approved by voters, the tax would bring in an estimated $900,000 to the city coffers annually.
Interim City Manager Jaylen French outlined the plan for the council, noting that the tax would raise money for general use and, as such, would need approval by just 50 percent plus one vote of the public in the general election. If the money was for a specific designated purpose, such as financing the police department, it would have to be approved by two-thirds of the voters. The one percent tax being proposed, however, would be for general, citywide use.
“This is a hard decision for everyone,” French admitted, noting that no one likes to raise taxes.
A main reason, however, for the council to bring a sales tax initiative forward is that all of the money raised through the implementation of the new tax would stay within the city. Conversely, of the 7.75 percent tax rate currently in effect in Escalon, a full six percent of the revenue goes back to the state; .75 percent goes to San Joaquin County and one percent comes back to Escalon.
“In real dollars, what that means is that the city generated $8.14 million in sales tax last year; $6.3 million of that goes to the state directly,” French explained.
And he said while some of that does “trickle down” to the city, it is very little.
Along with the millions heading off to the state, an estimated $778,000 of Escalon’s sales tax money went to San Joaquin County and $1.05 million stayed in Escalon.
“That equates to about 20 percent of our general fund budget,” French said of the $1.05 million.
He pointed out that the new one percent sales tax – one more penny on a dollar purchase – would not impact costs for non-taxable items such as groceries, prescription/medical expenses, real estate transactions, or rent and utilities.
Though the recently approved city budget for fiscal year 2024-25 is balanced, French and council members agreed that there was a lot of cutting that had to be done and the city can’t sustain that type of aggressive cost-cutting and still maintain services at a high level.
The measure going before voters on the November ballot is seen as a way to make up for some of those dollars lost to the state, keeping the tax dollars here in the city to support essential services.
Residents stepping to the podium to comment on Monday night aired some concerns about the city needing to recruit additional businesses to town so more people will come here to shop and residents themselves will stay in the city to patronize merchants; while others urged the council and the city to be proactive in getting the message out to the voters about why the tax is needed.
French said they anticipate hosting some community meetings to help educate the public about the measure and what the money would be earmarked for in the city. Those meetings will be announced at a later date.
