Story of the Year: Sales tax, cannabis biggest concerns for city governments in 2017

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Lindsay, Woodlake, Farmersville all pass off-election year sales tax measures, two pass sweeping commercial cannabis reform

By Paul Myers @PaulM_SGN

FOOTHILLS – Three cities in the Foothills of Tulare County took the opportunity of an off-year election to pass their much needed sales tax increases. Of those three, two went on to pass commercial cannabis taxes while their city councils passed sweeping cannabis reform to make way for new commercial cannabis businesses.

Woodlake
Before the election in November Woodlake sales tax was amongst the lowest in the county at 7.75%. The additional one-percent increase will bring the city to the highest sales tax rate in the county at 8.75% along with Lindsay, Dinuba and now Farmersville. According to city staff, the additional percent is projected to bring $400,000 of additional revenue into the city’s general fund.

City administrator Ramon Lara said during a council meeting last April that additional revenue through a sales tax increase would be allocated toward several departments and services. Public safety would benefit from additional officers and preventative programs. Recreational programs would benefit from additional infrastructure, youth sports and adult programs. Parks and equipment would benefit from additional tables, barbecues, lights and playground equipment. Streets and roads would see additional street repairs, pedestrian walkways and parking lots. Lights and landscaping would benefit from more murals, benches and lights throughout the city.

Woodlake director of community services, Jason Waters, says that the approval of the tax is a show of confidence in the city’s administration.

“Over the last couple of years we’ve been really successful in bringing projects to Woodlake and I think people are buying into what we’re selling,” Waters said in an interview with the Sun-Gazette last November. “I don’t think [the sales tax] passes if we weren’t able to show what we’ve been able to do [taxpayer] money and show that we’ve done a good job.”

To be fair Woodlake’s sales tax was not the cause of much consternation between the two ballot measures. It was clear to voters that the City was in need of additional general fund revenue. Cannabis on the other hand was a much more difficult measure to sell.

A large group of residents turned out to the Woodlake council chambers this summer when the Council voted in favor of ordinance 610 which repeals medical marijuana and mobile marijuana dispensaries, while setting up new guidelines for conditional uses for cannabis businesses. Even further the ordinance allows for commercial cultivation and sales with an up to 10% sales tax added on to the City’s already existing sales tax. And the guidelines in the ordinance are rather restrictive.

By approving the cannabis tax last Tuesday voters allowed the City to impose a tax of up to 10% for dispensaries and then $25 per square foot for the first 3,000 square feet and then $10 per square foot for each additional square foot after that. But that does not mean businesses moved in on Jan. 1.

Businesses couldn’t start applying for licenses until Jan. 1 and even then they are looking at a long road of documents before they can be approved.

Farmersville

Farmersville’s ½-percent sales tax increase should increase revenues by $300,000 according to projections and puts the City at 8.75%. The aim is to hopefully balance the City’s general fund which came up $68,000 short of projected expenses in 2017-2018 fiscal year. It could have been more but freezes to employee salaries and the concessions made by former city manager John Jansons helped to cut the deficit to what it is now. According to councilman Greg Gomez residents were understanding of the City’s position and understood the need for the sales tax.

“For me the community has a sense that we’re going in the right direction,” said Gomez in an interview with the Sun-Gazette in November. “When we were door knocking we kind of explained it to them…there wasn’t anything like they thought [the City wasn’t] spending their money right.”

Gomez went on to say that the City is benefiting from the skill of their finance director Steve Huntley. The City is not embroiled in controversy or faced with dysfunction and everyone is willing to help out, Gomez added.

At 8.75% Farmersville joins the ranks of Lindsay, Woodlake, and Dinuba as the highest sales tax rates in the county.

“I really want to thank the voters out there and this is going to put us on the good financial track…all of this money, it isn’t going to the State, it isn’t leaving town. It is staying right here in town,” Gomez said.

In December the Farmersville City Council voted to tax incoming cultivators just over $12 per square foot of space or 8.75% of gross receipts. Realistically the Council could have taxed businesses as high as $25 per square foot of space and 10% of gross receipts. And they still might, the current tax rate is scheduled to be reconsidered this June.

Lindsay

The City of Lindsay worked quickly to pass their full percent sales tax increase, raising their sales tax from 7.75% to 8.75%. The push came almost immediately after the City hired new finance director Bret Harmon. By June 2017 voters approved the increase, titled Measure O, and already they have started to put those dollars to work on public safety.

Lindsay City Council passed a resolution spelling out what they plan to use the additional $900,000 projected to come in each year on: hire, equip and train new public safety and code enforcement officers; to replace aging, second-hand public safety vehicles and equipment; to better protect and serve residents of and visitors to the City; to perform repairs to damaged or aging infrastructure; and to maintain other essential public services.

A couple of months after passing Measure O the City moved forward with buying a new fire engine that they are expected to receive within the year after it is constructed.

When it comes to commercial cannabis the City has decided that it wants no part of it, yet. City manager Bill Zigler said in an interview with the Sun-Gazette last November the City was not ready to move forward on passing new ordinances to allow for commercial cannabis to enter the city, nor do they have a tax in place to generate revenue from their presence.

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