Solvang voters will be asked this fall to approve an increase to the sales tax to boost the city’s coffers.
The City Council has voted to include the sales tax measure on the November ballot after a survey found support.
“I’m surprised, first of all, that the tolerance for a sales tax is as high as it is,” Councilman Robert Clarke said at last week’s meeting. “I didn’t think we’d get over 50%.”
Councilman Jim Thomas agreed that the survey results showing support were surprising considering the economy.
“I think it’s very encouraging, number one,” Thomas said. “Number two, we’re not making that decision, they are.”
The proposal would increase the sales tax in Solvang by 1 cent, or 1%.
Currently, the city’s sales tax sits at 7.75%, so the new rate, if the measure is approved, would be 8.75%.
The decision to put the sales tax hike before voters came after a consultant’s survey to assess the likely support, with 62.6% of the 200 people questioned saying they definitely or probably would support the measure.
“It does seem like it is feasible from our perspective, and it’s ultimately up to the council’s wise decision whether to move forward with this measure,” Bryan Godbe of Godbe Research said. “But it is feasible in this economic environment and in this election cycle.”
According to estimates, the 1% would generate about $1.6 million in revenue per year to support essential services.
Specifically, the Solvang Local Control and Essential Services Measure would ask, “To protect and maintain funding for City of Solvang services, such as pothole and street repair, flammable brush removal, 911 emergency response, neighborhood police patrols, recreation programs and general government use, shall the City of Solvang adopt a measure establishing a 1 cent sales tax, until ended by voters, providing $1.6 million annually that cannot be taken by the state, with independent citizen oversight, and no money for administrative overhead?”
The general tax measure, which will be assigned a letter designation this summer, will need more than 50% voter approval to pass.
If the city chooses to pursue a special tax, it would have to list specific ways the money would be spent. A special tax would require 66% voter approval to pass, which is why most cities choose a general tax measure.
Some cities include a sunset date for the local tax, but Solvang’s would continue until voters end it.
Solvang’s proposed 1% increase would follow hikes already approved by voters in Santa Maria, Santa Barbara, Guadaupe and Lompoc. Goleta voters are considering an increase in November. Carpinteria’s rate is 9%.
At one time, Solvang leaders discussed boosting the transient occupancy tax, or bed tax, but will only pursue the sales tax hike at this point. However, the consultant’s survey showed strong support for a bed tax increase.
— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.