San Luis Obispo will wait to put sales tax extension on ballot

San Luis Obispo will not seek renewal of its half-cent sales tax increase in November, instead opting to wait until the 2014 ballot.

The eight-year tax increase, known as Measure Y and approved by voters in 2006, will sunset on March 31, 2015.

The added sales tax brings about $5.3 million annually to city coffers.

The city had considered seeking renewal early in order to take advantage of expected higher voter turnout in November’s presidential balloting.

However, after wide-ranging community outreach, city staff recommended to the City Council that it is too soon.

“Basically, no one in the community felt any urgency that it needed to be done right now,” said Mayor Jan Marx.

A survey commissioned by the city late last year determined that San Luis Obispo voters remain in favor of extending the added sales tax to pay for essential city services.

Of the local registered voters asked in a telephone survey, 59 percent said they would likely support renewing Measure Y.

In 2010, a similar survey found that 64 percent of registered voters polled said they would vote yes. At the time, the council directed city staff to evaluate placing the measure’s extension on the 2012 ballot.

A series of public forums was held after that, and Assistant City Manager Michael Codron said it was expressed that community members want to see the measure’s entire eight-year track record before deciding whether to renew it.

If voters do not renew the tax increase, San Luis Obispo’s sales tax would revert to what the state sales tax rate is in April 2015. The current statewide rate is 7.25, which sets the current local sales tax at 7.75 percent.

The San Luis Obispo Chamber of Commerce, a proponent of the measure when it passed, encouraged the city not to seek renewal yet, saying that the current economic climate would make seeking renewal an “uphill battle.”

Marx said waiting until 2014 would also allow city staff the time to create two budgets — one with the added sales tax and one without — to clearly demonstrate its impact to residents.

Reach AnnMarie Cornejo at 781-7939. Stay updated by following @a_cornejo on Twitter.