Banning, San Jacinto Residents Asked Tuesday to Approve Tax Hikes, New Fees

By City News Service:

Eight Riverside County cities are asking voters in tomorrow’s election to support tax hikes and new fees to cover outlays tied to public safety and other services, though opponents question whether some of the proposals are necessary.

Banning, Blythe, Canyon Lake, Coachella, Desert Hot Springs, Indio, Palm Desert and San Jacinto all have measures on the Nov. 4 ballot that seek to augment or establish revenue streams.

In Coachella, city leaders are encouraging residents to approve Measure U, a 1 percent retail transactions and use tax that would be added to the existing 8 percent sales tax.

According to supporters, the revenue generated from the levy would offset increasing public safety expenses, though the additional money could be used for any purpose after it’s deposited into the general fund.

Banning’s Measure J would create an entirely new fee targeting mining operations. According to backers, the quarries where excavation has been occurring since 1925 have taken a toll on the local environment and curbed residential development -- without adequate compensation to residents.

The measure calls for an 80-cent levy on each ton of rock, sand and gravel hauled out of the mines. Proponents said with general fund revenue down 33 percent since 2008, the fee can’t be implemented soon enough.

San Jacinto’s Measure CC seeks a new 6.5 percent utility users tax on telecom services, water, gas, electricity, cable television and refuse collection. Supporters argue that the levy, which would sunset in 10 years, is critical to fund law enforcement services and fill a growing budget gap.

“This is intended to prevent significant cuts to general city services resulting from revenue shortfalls caused by economic factors,” according to a campaign statement. “San Jacinto policing levels are already 20 percent below the standard ... Over 80 percent of the general fund is spent on police and fire services.”

A group opposed to the proposal blamed the city council for budgetary red ink, saying the five-member panel spent the city into a hole. “Now they want to tax you so they can continue to spend more,” opponents wrote. “Why should businesses, residents and consumers be penalized because the council refused to stop spending?”

Canyon Lake’s Measure DD drew similar fire. Under the plan, a 3.95 percent utility user’s tax would be applied to generate an estimated $775,000 annually.

“Without more money, Canyon Lake won’t survive beyond the next several years,” according to a ballot statement. “Closure of the city’s only fire station would extend response times to 8-10 minutes or longer.”

According to critics, however, city leaders are trying a backdoor approach to enacting a levy that has failed to muster the two-thirds voter support necessary for passage in previous elections.

“So they call this a utility tax for the city general fund so it can pass with 51 percent of the vote,” according to a campaign statement.

Critics noted that the proposal does not provide any projections on how the levy would ensure long-term fiscal stability.

Desert Hot Springs, which is also asking voters for authority to tax marijuana dispensaries, is seeking a new 1 percent sales and use tax on all retail transactions. Measure JJ would net an additional $1.4 million in annual revenue, according to supporters. The city’s current sales tax is 8 percent, but much of that goes to the state and county.

Tax opponent and DHS resident Robert Bentley attributed the city’s current financial straits to a council plagued by “non-stop drama,” allowing “opportunities (to) disappear as they squabble.” He urged residents to vote down the proposal.

Blythe, Indio and Palm Desert are all asking voters to approve increased transient occupancy tax rates.

Indio is proposing that the “bed” tax on motels with 50 rooms or less, as well as campgrounds and recreational vehicle parks, be hiked from 10 percent to 13 percent -- the rate already charged lodgers at motels with 50 rooms or more.

Measure O supporters said the increase is a must to “protect essential city services.”

Blythe’s Measure X provides an analogous increase for all hotels and motels.

Palm Desert’s Measure G is seeking a bed tax hike from 9 to 11 percent. Backers touted the rate as “the lowest in the Coachella Valley.” But Councilwoman Jean Benson characterized the proposal as a “classic case of greed over need.” She said the city has reserves in excess of $50 million, making the tax hike unjustifiable.