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Santa Barbara Lays Out Rationale for Sales Tax Increase to Fund Infrastructure Backlog

Proposed 1-percent hike would bring the city an estimated $22 million a year for much-needed work

City Administrator Paul Casey told workshop attendees Tuesday evening that $25 million is needed each year to fully address a backlog of infrastructure maintenance. Click to view larger
City Administrator Paul Casey told workshop attendees Tuesday evening that $25 million is needed each year to fully address a backlog of infrastructure maintenance. (Sam Goldman / Noozhawk photo)

Two weeks out from adopting final language for a ballot measure, Santa Barbara Mayor Helene Schneider and City Administrator Paul Casey are voicing the rationale for a 1-percent sales tax increase that would fund much-needed infrastructure work.

A 1-percent, or one cent, increase would bring in about $22 million per year based on current sales-tax performance in the city. Casey told the light crowd Tuesday at the Central Library that fully covering a year’s worth of work would take about $25 million.

The next 20 years’ unfunded infrastructure needs are estimated to be $546 million.

Santa Barbara’s current sales tax is 7.75 percent — the same as Carlsbad, Huntington Beach, Newport Beach and Oceanside. Santa Maria’s is 8 percent.

A survey conducted this spring found that 64 percent of its 800 respondents would definitely or probably vote for the measure, or are undecided but lean toward saying yes.

Another 32 percent responded that they would definitely, probably, or are inclined to vote it down.

Final ballot language will be adopted by the City Council on June 27. The measure would require a simple majority to pass.

“We have an amazing history in the people involved with the city of Santa Barbara over the course of decades, who have really taken care to make Santa Barbara the place we love,” Schneider said, listing off giants of local history like Pearl Chase and Dwight Murphy.

“It’s a beautiful place on the planet, but we want its infrastructure and foundation also to be amazing.”

One of the most pressing needs has been road upkeep. Casey said 64 percent of city roads and streets have been rated as poor, at risk or failed — and that was before the pothole-spawning effects of this winter’s rains. 

Public Works Department staff have said $12 million annually is needed to keep up with road maintenance, though only a sixth of that gets put toward those purposes each year. The City Council has had to squeeze other parts of the city budget in order to perform triage on infrastructure needs.

The longer roads are allowed to deteriorate, Casey said, the more expensive it is to rehabilitate them. Repair and replacement work on storm drains, city facilities like such as stations and other cornerstones of municipal infrastructure also carry seven- and eight-digit price tags.

Another pressing infrastructure project for the city is a new police headquarters.

The current 28,000-square-foot building at 215 E. Figueroa St. was built in 1959 when the department had half as many personnel as it does today. The building does not meet modern seismic and accessibility standards, has outdated plumbing and electrical systems and faces serious space constraints.

The cost of a completely revamped headquarters is expected to be $80 million, plus $50 million in interest.

One source of the funding crunch was the dissolution several years ago of the city’s redevelopment agency, which paid for urban development projects with property taxes. The city contends that over the last five years, more than $100 million has gone to the state instead.

The expiration of a temporary state sales-tax increase, along with ever-declining revenues from the state gas tax, has exacerbated the situation.

However, state lawmakers’ recent vote to increases the gas tax for the first time since 1994 is projected to raise $52 billion over the next 10 years for infrastructure repairs in the state.

Santa Barbara expect to receive about $2 million of that annually, though the city administrator noted that there are already efforts underway to roll back the hike.

Casey pointed out that dozens of other cities have raised their sales taxes to at least 8.75 percent for the same reasons, but a top concern among skeptics of a hike remains accountability.

Schneider said City Hall has heard that concern “loud and clear,” and that the City Council wants to incorporate mechanisms such as a citizen oversight committee into the measure for transparency purposes.

She and Casey said the city has a long track record of ensuring tax money goes to its intended purpose.

Attendees also voiced concern over local and state governments nickel and diming folks with new taxes or small increases to existing taxes, like that of the gas tax.

Though it didn’t pop up Tuesday evening, commenters at council meetings have wondered what effect an increase in the regressive tax would have on low-income residents.

The survey that gauged public support for the hike also found that those same residents were more in favor of it than middle or higher earners.

“We think the reason behind that is that the small amount of money they would spend out of pocket on a sales tax increase would come back to services that they would enjoy and use,” Schneider told Noozhawk.

“Not to mention upgrading our streets and roads saves their own car maintenance, which are big ticket items. So they see that return on investment.”

Forty percent of the $22 million would be covered by the spending of out-of-town visitors, she and Casey added.

Input on the proposed increase can be sent to [email protected]

Noozhawk staff writer Sam Goldman can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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