A sales-tax increase isn't coming to SLO this year — but it's not gone for good

The new Bob Jones Bike Trail bridge, shown in March, crosses Prefumo Creek near Highway 101 and Los Osos Valley Road. The city is seeking new sales tax funding to help pay to complete the project.
The new Bob Jones Bike Trail bridge, shown in March, crosses Prefumo Creek near Highway 101 and Los Osos Valley Road. The city is seeking new sales tax funding to help pay to complete the project. dmiddlecamp@thetribunenews.com

It was floated a month ago as a possible ballot measure in the November election, but the San Luis Obispo City Council says its new proposed sales tax measure to pay for a host of infrastructure projects will have to wait another two years before voters weigh in.

The council decided Tuesday that waiting until the 2020 election would allow the city to better communicate its message about the need for the tax hike from 7.75 to 8.75 percent, and also prioritize the $418 million in unfunded projects.

The city has listed 73 projects in need of funding, including the Prado Road interchange, Bob Jones trail extension, Mission Plaza remodel, police station replacement and Laguna Lake upkeep. Many of the projects identified would be new and some would upgrade existing infrastructure.

A new 1-cent-per-dollar sales tax, if eventually approved by voters with a simple majority, could generate an estimated $14 million annually.

"We need two years to get into that outreach," council member Aaron Gomez said. "If there's a public perception that these are non-essential projects, right or wrong, that needs to be addressed. If they're not essential, maybe they shouldn't be on the list. If they are essential, we need to show why they're essential."

City poll on new sales tax

The city contracted Los Angeles-based firm, FM3 Research, to conduct polling on the proposal. Of the 846 city residents surveyed, 57 percent said they'd support increasing the sales tax to 8.75 percent, with 40 percent opposed and 3 percent undecided.

Despite the majority, the results fell within the survey's margin of error, indicating a November ballot measure could fail.

Laguna Lake on March 23 after three days of steady rain. Natural resource maintenance on the lake is one of the city's 73 unfunded projects. Laura Dickinson ldickinson@thetribunenews.com

San Luis Obispo resident Larry Todd, who spoke in public comment Tuesday, said he sees a priority problem as the city tries to pay down its $8.9 million budget gap over the next three years due to increased pension expenses while trying to fund major projects he believes are non-essential.

"The city will survive without a Mission Plaza update and enhancement, it will survive without a new police department building, and it definitely will survive without more bike trails," Todd said.

Todd, like most residents surveyed, said he would support funding infrastructure he believes to be essential to maintain city services.

The council also was also considering potential property tax increases, but appeared Tuesday to lean against them. Vice Mayor Carlyn Christianson said constituents have expressed a lack of support for property tax hikes, which would need to be passed with a two-thirds voter majority.

Next steps for a sales tax measure

City Manager Derek Johnson said that the city likely needs to do more community education on why the new sales taxes are needed, similar to how Cuesta College displayed the conditions of its facilities to convince voters to pass a $275 million bond measure in November 2014.

Johnson cited the aging police station as a possible facility to showcase through public tours to bring more awareness to the need for its replacement.

The Mission Plaza upgrade is a central focus to the city's downtown economic activity, Johnson said, and it would help grow local business by enhancing a unique downtown visitor experience.

"We need as a community to talk more about this project list," Christianson said. "Our polling person gave us good insight into where things are with folks and they're all over the map."

B1 Day of Dead1.jpg
SLO wants its display to be “fun, animated, three dimensional and educational — while highlighting unique destination attributes of the city of San Luis Obispo,” such as Mission Plaza. Laura Dickinson ldickinson@thetribunenews.com

The San Luis Obispo Chamber of Commerce recommended against including a sales-tax measure in the upcoming budget cycle, pending a refinement of a project priorities list.

"At this time I don't believe we have sufficient information or business community support for a sales tax, property or parcel tax to be successful," said Charles Rosales, the chamber's director of governmental affairs.. "We also don't know what other challenges or options will present themselves over the next couple of years, such as the repeal of SB1 (gas tax) or the approval of a self-help initiative (providing local control in order to self-fund specific, regional transportation projects)."

Rivoire dissents

Only Councilmember Dan Rivoire supported putting a sales tax initiative on the November ballot, saying that voters approved the Measure G sales tax in 2014 with a 70 percent approval. That tax serves to maintain essential city services and facilities.

Rivoire also noted city voters supported the half-cent Measure J initiative to fund local transportation costs with a 76 percent majority (countywide, voters nearly passed the initiative in 2016, falling just short of a two-thirds majority).

"Our voter base is hopeful for and asking us to invest in this thriving future," said Rivoire, saying he was "bullish" on a November ballot initiative.

Related stories from San Luis Obispo Tribune