Manteca is posed to make another “economic deal” to bring a regional sales tax collector to the city.
This time it is a 50-50 split of annual sales tax up to $3 million or 10 years, whichever comes first, to land the 130,000-square-foot Living Spaces Furniture showroom/warehouse. It will also create 90 permanent jobs.
The city is trusting projections that puts the store’s annual sales at $35 million. That means the local sales tax generated in a year would come to $350,000 and the Measure M public safety tax would generate $175,000 a year.
The reason for such deals is to snag big sales tax dollars that can easily go elsewhere and to tighten the vice on the outflow of Manteca residents’ taxable consumer dollars.
Sales tax and property tax account for well over 50 percent of the general fund money Manteca needs to provide day-to-day municipal services such as police, fire, street maintenance, park upkeep, and general government.
That said, the city does a lousy job of connecting the dots for the general public. While some get it others see such “economic deals” as corporate welfare or the wholesale abandonment of sales tax to provide funding needed for city services.
Since the city is confident with projections they term conservative for annual taxable retail sales they need to demonstrate why Manteca’s 81,450 residents should buy into the leap of faith.
Assuming a deal is executed, that can be done by the City Council directing staff to add another police officer when ground breaks on the furniture showroom/warehouse. It would send a clear message. Manteca’s mayor after joining others turning the ceremonial first shovel of dirt can announce to the gathering that on behalf of the council he is at that moment directing staff to start the search to fill a police officer position from Measure M sales tax receipts the store will collect.
That would send a powerful message. Given the time frame it takes to build a store of that size as well as go through the screening process to hire a police officer, the message can be re-enforced by having the new officer on hand at the store’s grand opening.
It would make it absolutely clear how Manteca benefits from the deal plus it clearly shows the council delivered on its promise the deal would boost municipal services.
Such a strategy may require having smelling salts on hand for bean counters at 1001 W. Center Street.
That’s because the payment of sales tax to the city from what is collected and sent to the state can take up to a year to reach city coffers. That means the first $175,000 in Measure M public safety tax collected over a 12-month period likely wouldn’t be in the city’s hands until well after the store has been open for a year. Meanwhile the city will have spent $150,000 on the salary and benefits of an additional police officer.
The city has well over $10 million in various general fund reserves and a decent cushion in the Measure M account. Keep in mind other retail ventures are coming on line that will bring in half cent sales tax that is needed to keep up with annual increases in the salary and benefits of the 15 firefighters and 15 police officers it funds.
If staff balks at such a council move, then our elected leaders should think long and hard about the wisdom of any such deals.
History, of course, proves such deals to be wise.
Many people can’t see the effectiveness of such a strategy. A $150,000 advance expenditure will not send the Measure M fund into a death spiral. Nor will it ultimately undermine the endeavor to have 25 percent of the general fund set aside in reserves meaning that if every $1 the city collects from taxpayers 25 cents won’t be spent for city services unless an emergency arises.
There is also another issue that it addresses that if there was ever an astute challenger to the incumbents could create political havoc.
Much ado has been made about how the city has fulfilled the original commitment of the Measure M plan passed by voters in 2006 as 15 firefighters and 15 police officers have been hired.
All things considered annual gains in taxable sales at existing retail outlets should generate funds to cover salary and benefit increases for those 30 positions. The city should be adding Measure M positions beyond the original 30 as the city grows.
New sources of income — especially if a general sales tax deal is used to secure them — should not cannibalize existing sources. Manteca has eight existing furniture stores. If the city anticipates the deal they are making will wipe those stores out the council shouldn’t make the deal.
Nothing against Living Spaces or stores I’m not about to mention, but I can’t envision myself not shopping for furniture at either Hafer’s or Manteca Bedquarters for a variety of reasons. While neither store is getting rich off me, over three-quarters of my furniture purchases I’ve made in the last 25 years have come from the two stores — more than $11,000 from Hafers and $2,000 plus from Manteca Bedquarters. The point is in terms of price, quality, selection, and service the existing furniture stores in Manteca should continue to do quite well.
Which brings us to the bottom line: Does Manteca’s leadership have enough confidence in what they are about to do to put a small ding in their $10 million plus in reserves to have a 16th Measure M police officer on duty when Living Spaces open?
