Pasadena leaders are contemplating asking voters to approve as much as 5 new taxes as officers warn of a rising funds drawback that they are saying might threaten funding for important companies.
Town council is anticipated to vote Monday night time on which tax proposals ought to transfer ahead for the Nov. 3 municipal election, Pasadena Now reported.
The assembly shouldn’t be about approving any taxes outright. As an alternative, council members will resolve which measures, if any, must be drafted for the poll, the place voters would have the ultimate say.
Metropolis officers say the proposals are wanted as a result of Pasadena is dealing with what they describe as a “widening structural deficit” — a state of affairs the place spending is rising sooner than income.
Town has relied on one-time funding and reserve cash to stability its Basic Fund funds for the previous three years, the native outlet reported.
Town’s present fiscal yr funds contains roughly $379.7 million in Basic Fund income in contrast with about $383.4 million in deliberate spending, leaving a niche of round $3.8 million that officers say was lined utilizing $5 million in one-time funds.
The imbalance is anticipated to worsen over time, with income projected to develop by about 3% to 4% yearly whereas bills are forecast to extend between 4% and 6%.
Though Pasadena continues to undertake balanced budgets and maintains robust bond scores, metropolis officers argue that present revenues are usually not sufficient to totally fund priorities together with hearth station upgrades, wildfire prevention, street repairs, pedestrian and bicycle enhancements, homelessness applications and financial growth initiatives.
To handle the shortfall, employees offered 5 attainable tax measures that collectively might generate between roughly $5 million and $30 million yearly.
- One proposal would add a quarter-cent native gross sales tax, bringing in an estimated $11 million annually. Pasadena’s gross sales tax price at present stands at 10.5% and is already scheduled to extend to 11% later this yr due to Los Angeles County’s voter-approved Measure ER. If metropolis voters additionally approve the native enhance, Pasadena would use its remaining native gross sales tax capability.
- One other proposal would create a parcel tax devoted to fireplace safety and street enhancements. Beneath the upper possibility, property house owners would pay about 24 cents per developed sq. foot, producing an estimated $30 million yearly. For the median 1,600-square-foot dwelling, that may quantity to roughly $384 per yr. A decrease model would increase about $20 million yearly for fire-related initiatives solely.
- The council can be contemplating an actual property switch tax on property gross sales that officers estimate might increase as a lot as $26 million annually. Nonetheless, metropolis employees cautioned that the income would probably fluctuate considerably with the housing market and warned the proposal might face organized opposition.
- A fourth possibility would introduce a brand new 10% tax on parking transactions, just like Pasadena’s resort occupancy tax. Officers estimate it might generate about $5 million yearly.
- The ultimate proposal would overhaul town’s enterprise tax system by changing its decades-old employee-based construction with a gross receipts mannequin utilized by different California cities. Workers estimate the change might generate an extra $10 million to $15 million yearly, although they mentioned the proposal would probably require extra public outreach and might not be prepared in time for this yr’s poll.
Metropolis employees mentioned they favor pursuing the quarter-cent gross sales tax as a result of it might present a secure supply of basic income and is just like measures beforehand authorized by native voters.
For funding devoted initiatives, employees advisable the parcel tax, saying taxes tied to particular public companies equivalent to hearth safety and infrastructure enhancements have traditionally obtained stronger public help.
Officers have been extra cautious in regards to the proposed property switch tax, describing it as “unstable” and warning it might have “unintended results” on each residential and business actual property markets.
Beneath California legislation, basic taxes require approval by a easy majority of voters, whereas particular taxes earmarked for particular functions should obtain help from not less than two-thirds of voters.
If council members direct employees to maneuver forward Monday, closing poll language is anticipated to return later this month earlier than Los Angeles County’s Aug. 7 submitting deadline. Any measures authorized by the council would then seem earlier than Pasadena voters within the Nov. 3 election.
