How the City Spent Your Sales Taxes

Written by Neil Farrell

Neil has been a journalist covering the Estero Bay Area for over 27 years. He’s won numerous journalism awards in several different categories over his career.

March 16, 2022

In case you were wondering where all those sales taxes you pay in Morro Bay went, a citizen’s oversight committee recently issued a report on the revenues and expenditures of the City’s two special taxes for last fiscal year.

And while Measures Q and E have provided millions, the City hasn’t spent a sizable chunk building up a hefty unspent/reserve account.

Measure Q is a ½-percent local sales tax approved by voters in 2006, mainly as a means to fund the replacement of the City’s old Harbor Street fire station, which was damaged in the 2003 San Simeon Earthquake and condemned.

Measure Q listed fire and police department needs, street repairs and storm drain maintenance as the uses for the monies. The city built its new firehouse and spends some $81,000 a year of M-Q monies to pay the debt.

Measure E-20 is a 1% local sales tax hike proposed by the City and approved by voters in November 2020. Its intended purpose was to support public safety in the face of the Coronavirus Pandemic, which cost the City considerable lost revenues with the pandemic response’s shutting down of so-called “non-essential” businesses.

E-20 was also intended to address tight, funding issues the City faces on a near annual basis and to solidify support for public safety.

According to a summary of the Citizens Finance Advisory Committee’s (CFAC) report for FY 2020-21, the total revenues from Meas. Q and E was $1.98 million with $1.11 from M-Q and $869,000 from M-E, which didn’t take effect until Spring 2021. It was projected to raise $2 million a year in the impartial ballot analysis from the election, given a full year and a normal economy.

The CFAC report said the City spent $1.32M of the $1.98M that came in and is carrying a reserve balance of $1.23M into the current fiscal year. It lists a cash balance of $439,000.

Of the spending in 2020-21, the Fire Department got $480,000 with $330,000 in salaries for personnel to fill in for vacations and for overtime to staff the required 4-man crews. The debt service on the new firehouse was $83,000.

The fire department bought $26,000 in safety equipment and paid $56,000 towards the debt on a replacement engine.

It also transferred some $282,000 to City Hall to support the general fund.

The City spent $425,000 on street maintenance and $132,000 for the Police Department. Of that, $83,000 went to staff overtime, $29,000 to the County Sheriff’s Department and $20,000 in equipment and supplies.

Interestingly, the City didn’t spend one thin dime on storm drain maintenance, which is perhaps not a high priority as the State continues in drought conditions.

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