Mayor Darrell Steinberg kicked off an effort on Thursday to renew and increase the city’s sales tax to pay for jobs, housing, and social-equity programs.
The city’s Measure U sales tax was first passed by voters in 2012 and currently raises around $50 million a year to pay for police, fire, and parks, services that were impacted and lost during the recession. The tax will expire next year, however, and Steinberg is asking his city council colleagues and voters to re-up it this November election.
He’s also proposing to double Measure U to a full penny, and to use the new revenue to pay for a variety of social services. The new increase would also be permanent.
During a speech at Sacramento City College on Tuesday, the mayor outlined his vision. He discussed how the Stephon Clark shooting “shed a harsh light on the continued cycle of poverty, despair and generational trauma that is the reality for too many members of our community,” and how “a single penny could change Sacramento” while making his case for increasing the sales tax to benefit communities of color.
Stephanie Bray is the head of the United Way Capital Region and attended the speech. She points to a recent study by the Policy Link group. She says it shows a need for investment.
"Inequity costs about $20 billion for this region. So, when you have communities that are left behind from an economic development standpoint, that results in a real loss,” Bray said.
Barry Accius is founder of Voice of the Youth leadership program. He says he's waiting to see the City's plan for spending the money before he decides whether to support it.
"If we're going to put out the idea of helping these marginalized communities and putting some real effort into the economics and the growth, that does not involve with community policing or any idea like them thinking, 'We're going to put some more police over here or we'll set this stage.' We need to focus on economics," Accius said.
David Wolfe is with the Howard Jarvis Taxpayers Association, which typically opposes tax increases.
"Sales taxes are very regressive. It tends to be your lower-income people that tend to pay a greater percentage of that sales tax revenue. And, listen, we have two dozen cities right now in California with sales taxes over 10 percent," Wolfe said.
He added he worries the money would end up paying for unfunded pension liabilities and arena costs.
The mayor proposed that half of the new tax, an estimated $25 million, could go toward a capital fund to invest in jobs in low-income neighborhoods and affordable housing. He says this fund would accumulate over the years, and that any expenditure by the city would need to be matched by the private sector — “a smart requirement that would allow us to invest as much as $2-and-a-half billion in Sacramento’s economic future,” he said.
Steinberg said the other estimated $25 million from the increased Measure U tax could be allocated to neighborhood-based services, public safety and investments to get young people ready for the workforce.
The original Measure U was a specific-use tax and required only a majority of voters to increase the sales tax from 7.75 percent to 8.25 percent.
Steinberg’s vision for the new Measure U would increase the sales tax to 8.75 percent. It would be a general sales tax, as well, which would still only require 50 percent of the vote, since it would not ask voters to spend the money in specific ways: The council would say how it could spend the money, but the city wouldn’t be required to those expenditures.
City Council is expected to discuss Steinberg’s proposed Measure U increase next Tuesday.