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Date ArticleType
1/14/2009
Chamber Board Opposes Measure A Tax Increase


By Fran Blackney
Business Advocate

In December, the Clovis Chamber Board of Directors voted to oppose Measure A on the March 3rd ballot. This initiative will increase the Clovis sales tax by a full 1% to help pay for city services.

The faltering economy has reduced the amount of funds collected by the city from sales and property taxes. The city has already made substantial cuts including givebacks by the police and fire departments. It is also looking at layoffs as another way to close the budget gap.

The prospect of an increased sales tax was first brought up in 2007 when a citizens’ committee, that included the Clovis Chamber, was commissioned to explore the need and feasibility of such a tax. The committee recommended a ¼% tax that would cover roads, police and fire, landscaping and parks.

In the fall of 2008, after a poll of 500 Clovis citizens, the city decided on a 1% increase that will fall to ¾% after 10 years. After much debate and discussion, the proposal was put on the March 3rd ballot.

The city broke down its needs the following way:
• $8 million to restore services to the pre-2006-2007 levels. These include money spent for police/fire, general services, parks and street landscaping, planning and development and an increase to the reserve account
• $11 million for “enhanced” city services that include more funds for the above departments.

The city projects that the 1% tax increase will create about $15 million a year.

The tax is a general fund tax that only requires a simple majority to pass and must cover general expenses. A special fund tax that would cover only police and fire would require a 2/3 majority, a number not reached by the polling data.

The Chamber Board of Directors appreciates the city’s efforts at cutting the budget but it feels that a tax increase is more harmful than helpful to city businesses and its citizens.

It is harmful to businesses as their prices will increase that will force customers to consider shopping in Fresno or online. In this weakened economy, adding costs to consumable goods at a time when people are not spending their money makes no fiscal sense. People are comparison shopping and are thinking about every penny, no matter how few, that goods are costing them.
To make matters worse, Clovis is facing close competition from the Campus Pointe center at Fresno State and the Fancher Creek project on Clovis Avenue. Both these centers will be charging the lower sales tax.

The tax increase is harmful to consumers, especially those on lower and fixed incomes. Think about seniors, students, single parents, whose income sources are limited and who must be careful about how they spend their money. They are also the ones who are less able to travel into Fresno to save their dollars.

With the passage of this tax increase, Clovis will have the second highest rate in the state of California – close to 9%. That is even higher than any city in the Bay Area where the cost of living is so much higher. We can’t afford it.

The fiscal setbacks experienced by the city have happened before, perhaps not to this degree, but the economy has always snapped back. It may take awhile, but it will this time also. But the sales tax increase has no sunset. Oh sure, it’ll fall to ¾% in 10 years, but the city will have already budgeted to spend all the increase. In 10 years, will they be asking for more to fill that gap?

Remember that this is a general fund increase. Revenues from this increase are not specified for public safety. They can be spent on anything the city needs. According to city figures, over the past 10 years, the Clovis population has grown by 37%, the budget has grown by over 104% and property tax revenue has grown by 162%.

Reliable economists all agree that raising taxes in a downturn is not fiscally responsible. Higher costs make people spend less and it will happen here in Clovis. The Chamber Board believes that this tax increase will actually produce less funds for the city, not more and that the fiscal crisis will grow larger.

We need to add sales tax generators to produce additional sales, not tax hikes.

We invite you to visit the web site www.nowayona.com and visit the Chamber blog at www.clovischamber.com.

The Clovis Chamber will be keeping the public informed about the tax increase and encourages everyone to vote No on March 3rd.