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Santa Barbara to Explore Sales Tax Hike at March Budget Workshop

Looking for ways to generate more revenue, the Santa Barbara City Council will begin considering options next month, including an increase in the city’s 8 percent sales tax rate.

During a meeting to prepare for the upcoming budget deliberations, council and staff recently discussed the city’s long-term infrastructure needs, like renovating Parks & Recreation Department facilities and building a new police station, said Nina Johnson, assistant to City Administrator Jim Armstrong.

Council members haven’t given any direction yet, but want more information about options for increasing revenues, Johnson said.

The presentation to council members outlined municipal finances in some detail but the message was simple: revenues are getting better, but the city’s needs are growing every year.

In 2012, Santa Barbara paid out $76.349 million in salaries, retirement contributions, health insurance and other benefits for the city’s 1,000 or so regular employees and few hundred hourly employees, Johnson said. Over the next few years, the city expects salary increases for every employee group as well as more expensive health insurance costs.

According to officials, medical insurance premiums are expected to jump 10 percent per year, with dental expenses increasing 5 percent and vision 2 percent.

City staff suggested that the council plan a workshop for public input on new revenue measures and consider placing a revenue measure on the November ballot. Johnson said a workshop has been scheduled for 9 a.m. March 13.

A 2008 Infrastructure Financing Task Force report recommended that the city consider a half-cent sales tax increase, general obligation bonds and dedicating 10 percent of city revenues to infrastructure investment by 2012, which will likely come up at the next meeting.

The city’s general fund has been coming in slightly under budget for the past few years, but the capital improvement program is underfunded.

Johnson said staff has identified $642 million in capital projects but there is only $201 million in funding available for undertakings like a replacement police station, the rebuilding of Fire Station No. 7 on Stanwood Drive, a City Hall elevator and the renovation of the Cabrillo Bathhouse & Gym. The streets capital program alone needs $216 million, according to staff.

At Tuesday’s Finance Committee meeting, council members will discuss rate increases for water and wastewater customers. The meeting is scheduled for 12:30 p.m. in the David Gebhard Public Meeting Room at 630 Garden St. before the regular council meeting begins at 2 p.m. at City Hall, 735 Anacapa St.

Noozhawk staff writer Giana Magnoli 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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