Half Moon Bay will start preparing a potential ballot measure ahead of the November election that would increase the city’s sales tax after receiving favorable survey results from residents during City Council’s meeting.
City staff conducted a poll with their partner FM3 Research to garner public opinion from voters on the idea of increasing the city’s sales sales tax, revealing a majority of support for the measure. The survey asked 318 voters in both English and Spanish from May 22 to June 2.
Results indicated that 63% of voters would support increasing the sales tax by a half-cent and 33% would not. The top reasons why some would vote no on the measure are because they feel taxes are already high enough and concerns about budget mismanagement.
Staff also reached out to local businesses for feedback on the potential increase. Most did not express support for the measure primarily because they consider sales tax as part of their overall prices and they feel that they have to charge customers so much already.
The City Council proposed a plan in order to combat the city’s $3.9 million structural deficit going into the 2024-25 fiscal year. Structural deficits occur when a city’s expenses are persistently greater than their revenues.
According to Tuesday’s council agenda report, the city is facing a 43% increase in public safety costs, their biggest expenditure. That combined with lagging tourism and lower than expected revenue from sales taxes and property taxes has left the city in a multi-million dollar deficit.
A half-cent increase would bring in an additional $1.8 million to $2 million in revenue. Data also showed that a high proportion of sales tax is paid by visitors. Roughly 40% of the city’s sales tax revenue comes from tourists, said Half Moon Bay City Clerk and communications director Jessica Blair.
If the measure gets approved to be on the ballot, Half Moon Bay voters will get to decide in November if they want to see a half-cent sales tax increase. The City Council will vote on whether to put it on the ballot during their July 16 meeting.
