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Here’s the problem with the 1 percent sales tax hike request Manteca’s City Council may make
PERSPECTIVE
pennies
Pennies can add up.

A penny for your thoughts on a possible 1 percent sales tax hike for Manteca.

There has been a need to increase municipal revenue for a long time.

Some of it has to do with playing catch up.

Some of it has to do with staying ahead of inflation.

Some of it has to do with the real need to secure and build the amenities a city literally a decade from — give a year or so in either direction — to surpass 100,000 residents.

The growth genie clearly can’t be put back in the bottle.

The real need for a number of years has been to get it right.

That, of course, takes adequate revenue.

City Manager Toni Lundgren made her preliminary case for a sales tax increase in a press release.

No real surprises except for perhaps the size of the ask.

First, let’s get a few preliminaries out of the way.

A sales tax hike is the only thing that the city could ever ask of voters that has a chance of being successful.

Anything that jacks up property tax — a community wide facilities district or a parcel tax — is a tough mountain to climb.

It would virtually be DOA.

That’s because people have to live in houses or apartments.

Both a CFD and parcel tax would be paid by homeowners and renters via pass thru rent hikes. You could argue renters would have it worse as landlords would surely pass on more than what the new tax would be to recover costs.

And whatever the initial tax would be — whether it was a CFD or parcel tax with an inflation index — it would go up 2 percent a year based on Proposition 13 caps.

And when property sells at higher market value, a new tax tied to property with further erode the last vestige of affordable at-market housing — homes that predate 1995.

There never was an effective option other than a sales tax hike.

A sales tax is basically a consumption tax that doesn’t apply to most groceries (basically food that is not prepared fresh at supermarkets such as deli sandwiches). Nor does it apply to prescriptions for medicines or medical devices.

The more you consume, the more you pay.

A one percent hike would add 15 cents to a $15 shirt bought in Manteca and 50 cents to a $50 shirt.

As for everyone’s most expensive consumer purchase — a vehicle — it would not discourage people from out-of-town from buying cars in Manteca.

State law requires the sales tax on vehicle purchases to be based on the tax rate in whatever jurisdiction the car is being “garaged.”

That is Franchise Tax Board jargon for where the primary residence of the buyer is located.

It also means a Manteca resident who has a deal for $45,000 on a 2024 Mustang from Manteca Ford that is identical to a deal offered by Heritage Ford in Modesto would not save $225 in sales tax by buying in Modesto.

Modesto’s current rate of 8.75 percent would be lower than Manteca’s proposed rate of 9.25 percent.

But the Modesto dealer can’t charge a Manteca buyer the Modesto sales tax rate. State law requires the Manteca rate to be charged .

Then there is the fact out-of-town buyers at big ticket stores like Bass Pro Shops, Living Spaces, and Costco will be paying the higher tax.

The same would be true of purchases at convenience stores and dining places.

Now for the problem.

First and foremost, a half cent hike in the sales tax likely would be easier to sell.

That would generate $10.5 million.

If half of that was dedicated to public safety, it would cover the cost of nine more firefighters and nine more police officers.

As such, it would bring Manteca up to par.

Nine fighters would allow the 24/7 staffing of a sixth fire engine.

The additional 9 police officers coupled to what is already in motion would give Manteca 88 officers one almost per 1,000 residents.

Although there is no such standard for staffing, it generally is believed to be a reasonable target.

That would leave $5.25 million annually for other needs.

It isn’t really a lot of jack.

Let’s assume for one second the council — the one in office and those who will be in the future — will spend 25 percent of extra 1 cent sales tax on bringing public safety personnel staffing up to a more effective level.

That brings up the  $15.75 million question.

What are the city’s intentions with the left over $15.75 million?

There are clearly a lot of things the city needs and wants.

And that’s the problem.

Lundgren’s press release notes an oversight committee will be formed if the tax hike passes.

That five-member citizens committee would recommend a spending plan to the council and then monitor expenditures.

That isn’t good enough.

The needs to be some parameters established before the measure is placed on the ballot.

It’s a question of transparency and trust.

Two things this council and city management have said they are committed to.

It doesn’t need to be specific per se.

Here’s a suggestion.

Commit a quarter ($5.25 million) of the annual $21 million to hiring additional public safety personnel and the equipment they need to do their jobs.

Commit a quarter ($5.25 million) to other city departments.

Commit the remaining $10.5 million to leverage borrowing for big ticket needs — interchange grades for Airport Way and Main Street, a new police station, the establishment of another community and such.

The truth is Manteca can’t afford to wait until it has all the money on hand to build big ticket items.

Construction inflation alone is a big reason.

And given Manteca is clearly situated to keep growing and has a sound credit rating, the city is well positioned to borrow.

It is important that there are assurances that this tax hike request, if approved by voters, doesn’t just stop a backslide and brings up services to where they should ideally be at but also assures Manteca has a strong future.

It doesn’t have to be as outlined above.

But the council — and by extension — the city management need to make it clear they have a vision and not just appear as if they are shooting from the hip.

This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at dwyatt@mantecabulletin.com