Morro Bay’s proposed sales tax hike that will go before voters in November now has an official name, and an impartial analysis has been submitted along with pro and con arguments.
Named, “Measure E-20: Morro Bay Local Recovery/Emergency Preparedness Measure,” E-20 would enact a 1-percent (1¢ on every dollar) sales tax on “gross receipts of retailers from sale of most tangible personal property sold in the City at retail,” reads the impartial analysis by City Attorney, Chris Neumeyer.
“The measure also places an excise tax upon the storage, use or consumption in the City of most tangible personal property purchased from any retailer for storage, use or consumption in the City of most tangible personal property purchased from any retailer for storage, use or other consumption in the City at a rate of one cent per dollar of the sales price of the property.”
That would also include any delivery charges that are subject to State sales or use taxes, regardless of where something is delivered. What is and isn’t taxable with E-20 is defined by the California Department of Tax and Fee Administration, according to Neumeyer.
The City Council can change what is included under the new tax, but must ask voters to increase it. The tax will be in effect until ended by voters through another ballot measure.
Increase On Top Of City Tax
E-20 would be in addition to the already enacted Measure Q (M-Q), a half-cent sales tax approved by voters in 2006.
M-Q revenues have steadily risen since enactment, and now raises about $1 million a year under normal economic conditions, and was promised by the city council to be used for police and fire department needs, fixing streets, and maintaining storm drains.
A large part of the M-Q monies is paying off the Harbor Street Fire Station.
It too is a general fund tax and the City’s Citizen’s Finance Committee reviews the City’s use of those monies. The committee will also review spending of the new, E-20 taxes, should it get over 50% “Yes” votes. The prediction is that E-20 will raise $2 million a year.
E-20 Uses Listed
The analysis includes a list of targeted uses for the new taxes, though it’s a “general use tax,” meaning it can be used for any general fund expenditures.
Stated purposes are (but not limited to): maintaining the local police and fire departments; maintaining around-the-clock paramedic fire crews and 9-1-1 dispatching; maintaining the City’s health emergency/disaster preparedness; keeping beaches and public areas clean and safe; and, retaining and attracting local businesses.
The new tax would not be charged on groceries, prescription medicine and real property, according to Neumeyer’s analysis that also declares that 70% of these new taxes will be paid by visitors and non-residents, “and thus will contribute to the City’s ability to maintain general public services used while visiting.”
Supporters Stress Local Control
Supporters of E-20 extoll the need for the tax hike “to ensure the City of Morro Bay is prepared for any health crisis or catastrophic disaster,” according to the argument in favor of E-20 that will appear in Sample Ballots. “Today it is more important than ever that Morro Bay maintains our LOCALLY CONTROLLED police and fire departments rather than contracting these out to outside agencies.”
The argument goes on to ask, “Did you know 70% of the calls to the Morro Bay Fire Department are for emergency rescue and medical emergencies?
“Vote YES on E-20 to prevent significant reduction to the service of our Morro Bay Fire Department so skilled, local firefighter-paramedics can continue to respond to our local life-threatening emergencies and save lives!”
The argument also says, “Yes on E-20 makes sure visitors pay their fair share for using our services, roads and beaches.
“Yes on E-20 protects Morro Bay’s small harbor town character by keeping our public areas healthy, safe and clean and protecting our local property values.
“Vote Yes on E-20 to protect the financial stability of Morro Bay, its residents and local businesses.”
And, “A penny on a dollar purchase is a small price to pay to help our community recover from the pandemic.”
Rob Kitzman, Janet Gould, Stephen Peck, Jane Heath and Ken Vesterfelt signed the pro argument.
Opponents Say E-20 Misleading
In the “con” argument against E-20, opponents say, “The proposed increase in Morro Bay’s sales tax adds an additional burden to our local residents and small businesses, all of whom are struggling to stay afloat in the face of the COVID-19 Pandemic.”
The con argument says that while the name is “Local Recovery/Emergency Preparedness Measure” the tax hike was first introduced before the pandemic.
“Although labeled ‘Recovery,’ it is proposed as a permanent tax increase with no ending date. The City Council’s proposed user sales tax increases from .5% to 1.5% per dollar. This is a 200% tax increase.”
The argument said that local businesses are experiencing hard times due to the pandemic and any tax increase that adds to the cost for their customers will impact sales.
“Our small businesses are vital to Morro Bay’s future,” the argument says. “We need to help them not burden them.”
It also points out that residents have already been hit with “large increases in utility rates, most notably the increase in sewer/water bills. For example, 300% sewer/water since 2015, and garbage increase 20.5% just this year.”
The con argument implicates the city council made poor spending decisions. “The current mayor and city council have not properly managed the income to the City,” the argument says. “An example of their wasteful spending is this ballot measure: paying consultants $85,000 to help get this sales tax increase passed.”
It offers an alternative to hiking taxes. “A better alternative to a sales tax increase is requiring our city manager to cut the overall general fund budget by 10%, in addition to cuts already made. A better long term plan will provide a long term fix to the City’s economic woes and preserve our first responders.”
The con argument was signed by John Weiss, Richard Sadowski, and Dan Sedley of Citizens for Affordable Living, the main opposition group to the City’s $130 million new sewer plant and wastewater recycling system, now under construction. Weiss is running for Mayor and Sadowski signed as a city council candidate.
Voting Time Nears
Registered voters will soon receive Sample Ballots in the mail and these arguments will be printed in them, along with whatever rebuttal arguments are submitted for publication.
This year’s Nov. 3 Presidential Election is shaping up to be one for the ages due to the coronavirus pandemic. Changes include: every registered voter will receive a ballot in the mail and can either fill it out and mail it back, or they can drop it off at drop boxes the County Elections Office plans to put out in every community in SLO County. (Look for one to be erected at Morro Bay City Hall.)
There will be just one, in-person polling place at the Morro Bay Community Center on Election Day. The City normally would have two.
The County Clerk’s Office is looking for election workers and volunteers after some 46% of the volunteers from the March Primary Election said they will skip November due to concerns about the virus.
And 46% of the polling sites countywide also canceled, forcing the County Clerk to find new polling places, and ones that are large enough to ensure there can be social distancing for voters.
Even “Election Day” is changing, as polls in California will be open for 4-days instead of just one.
And a U.S. Presidential Election will begin for the first time ever, perhaps fittingly this year, on Halloween, Saturday, Oct. 31 and continue daily through Tuesday, Nov. 3.