One-percent sales tax increase for South Lake Tahoe to be added to the November ballot

SOUTH LAKE TAHOE, Calif. - City Council approved unanimously at their meeting Tuesday to send what is being called the "South Lake Tahoe Fire Protection, Emergency Response, City Services Measure" to the ballot in November.

If voters approve the measure, a one-percent sales tax increase will be added in the City of South Lake Tahoe to all taxable purchases to meet funding shortfalls, according to the City.

The current tax is 7.75 percent, and a new 8.75 percent tax would be closer to other tourist areas like Palm Springs (9.25 percent),Pasadena (10.250 percent), Santa Cruz (9.250 percent), Capitola (9.00 percent), Truckee (8.25 percent), Carmel (9.25 percent) and San Francisco (8.50 percent). California’s minimum rate of 7.25 percent is the highest in the United States, but many cities have now raised their taxes to the state’s maximum of 10.25 percent.

The City hired a consultant who has been surveying taxpayers to see if they would support the sales tax hike that would support fire services, first responders, road repair, and snow removal. They found an overwhelming majority in favor of the tax hike so the Council decided to go with their findings and let the voters decide if they wish to support the funding of "must haves" of fire, safety and roads.

“Even before the COVID19 pandemic, the City has had to grapple with local funding issues made worse by years of state takeaways,” said City Manager Joe Irvin. “As part of the City Council’s strategic goals set last year, we began outreaching the public to get their input on service priorities, and we are gratified that hundreds of South Lake Tahoe residents have provided input to date.”

“Reducing the threat of wildfires, maintaining fire protection and 911 emergency response, and retaining qualified police officers and firefighters, as well as basic services like maintaining snow removal, protecting lake water quality and treating stormwater runoff, repairing streets and roads, keeping public areas safe and clean, and supporting our local businesses were consistently at the top of the community’s list,” continued Irvin. “Unfortunately, with the impacts of COVID19 we are looking at a $6.5 million deficit – mandating future cuts to the very services our residents deserve and want most.”

If passed, the extra one percent would bring about $5 million into the budget, funds the State could not touch. At this time, the City keeps only 1.5 percent of the 7.75 percent sales tax collected.

The Council discussed adding a sunset clause to the measure, but since the consultants didn't included that wording in their survey it was decided to not add it at this time.

A one-percent tax increase on taxable goods would add $1 to $100 spent, or one cent on every dollar.

With the unknowns of COVID's affect on the budget and the passage of Measure T which bans most vacation home rentals, the City is looking for a reliable revenue source. Annual costs like roads and fire safety need a steady stream of funding.

The last tax measure proposed for a road repair and maintenance program failed to get the two-thirds vote needed. Since this 2020 measure would put money into the general fund, it will only need fifty-percent plus one to pass.

Irvin said people want to know where the money goes, and they would do an annual report on what was received, and what was spent, along with an annual audit. The state only requires the audit which isn't as transparent as many voters want.

"We will tell the story annually," said Irvin.

To close past budget deficits, South Lake Tahoe has deferred significant public works improvements to streets and has not had the funds to update vital equipment that our firefighters and paramedics need. Currently, 60 percent of South Lake Tahoe roads are rated as “poor” or “very poor” by independent engineers, and firefighters do not currently have the updated life-saving equipment necessary to protect our community or themselves.

The City hired seven new firefighters to staff the reopening of Fire Station 2. While a SAFER grant partially funded them in the short term, money needs to support their salaries in the long term.

“We had a choice of reducing vital services even more in the wake of COVID19 to continue balancing our budget or give our voters the opportunity to consider approving locally-controlled funding to meet these needs,” Irvin said. “With Tuesday’s action, the Council has elected to let the community decide. We encourage all eligible South Lake Tahoe residents to vote in the upcoming election. As the State has recently changed the process of the all-mail ballot election, the City Clerk will be updating the community on any balloting changes and recent voter registration laws that expand the ability to participate.”