In November, American Canyon residents will vote on a 1% sales tax increase to help the city stave off a massive deficit projected over the next five years.
Measure P would increase the city’s sales tax rate from 7.75% to 8.75% , in line with the city of Napa’s rate. A majority of the sales tax dollars go to Napa County and California.
City officials say the increase will add an estimated $3.7 million annually to remain in American Canyon’s general fund.
Measure P would apply to some sales — cigarettes, coffee, gas, clothes, furniture, cars and home improvement supplies — but would not apply to groceries, medications, baby formula, diapers or services like nail salons, barbershops and auto repair. According to the city, Measure P would mean American Canyon gets $2 of every $100 purchase within city limits. The rest of the sales tax revenue goes to Napa County and California.
According to ballot arguments in favor of the measure, the revenue could fund 911 emergency response, wildfire mitigation, parks and youth and senior programs. The use of Measure P funds would be approved in public by City Council members.
Locally, voters are split on Measure P. Sindy Biederman, who is running for American Canyon City Council in November, has said publicly that she is against a sales tax increase.
“City Hall must earn our confidence before asking for more,” Biederman said, citing water rate increases and rising grocery costs in American Canyon.
But at a September community meeting, City Manager Jason Holley said that only about 50% of sales taxes are paid by American Canyon residents. The other 50% is paid by people passing through and by businesses, like wine sellers and homebuilders, according to Holley.
Right now, sales taxes make up 10% of the city’s general fund revenue, bringing in around $3.5 million. In the last two years, both the Coca-Cola bottling plant and Ikea distribution warehouse in the city’s industrial area were shuttered — two of American Canyon’s top employers and major sources of tax revenue.
Though American Canyon’s current budget is balanced, the city is “treading water,” Holley said.