Plumas Voters Face a Decision on 1% Sales Tax Levy

QUINCY — Ballots for the June 2 election being mailed this week will ask Plumas County voters to decide whether to approve a 1% countywide sales tax levy, known as Measure B. The measure was placed on the ballot as a result of unanimous votes of the county Board of Supervisors in November and January. If the measure is approved by a majority of voters, the county’s sales tax rate would increase from 7.25% to 8.25% for a 12-year period, then revert to 7.25%.

According to information the Supervisors provided at their January 6 meeting and in a presentation on April 7, the levy’s purpose is to address a long-term structural deficit in the county’s finances. The county’s expenses have increased as a result of rising wages, pension and health insurance obligations, disaster recovery, and deferred maintenance of county infrastructure, while traditional revenue sources have declined and federal and state funding is being cut back. Recently, one-time funds from sources such as federal pandemic relief programs have been used to fill the gap and maintain services, but that practice is not sustainable, Board Chairwoman Mimi Hall explained. The county has taken steps in the last two budget cycles that have cut the deficit by more than 50%, but that alone will not be enough to meet the county’s obligations, she said.

The proposed tax levy is expected to raise about $3 million per year, which would go into the county’s general fund. The general fund supports county departments that provide key services including law enforcement, emergency services, senior nutrition and transportation, veteran services, libraries, and county facilities, including parks and the fairgrounds. The Board of Supervisors estimates that tourists, visitors, travelers, and other non-residents who shop or dine in Plumas County would contribute a significant portion of the expected revenue.

The proposed levy’s impact on county residents has been the subject of controversy. Sales taxes are said to be “regressive” because less affluent individuals typically spend a large portion of their income on items that are taxed. Opponents of Measure B argue that the tax would fall disproportionately on senior citizens and others on fixed incomes. Dave Roberti, a spokesman for a citizen and business-supported opposition group, “No on Measure B,” told the Mountain Messenger that an extra $5 monthly expense could be a burden for senior citizens. However, neither Mr Roberti nor the Board of Supervisors provided an estimate, when asked, of the amount individual residents could expect to pay in added sales tax.

Estimating the cost of the levy for individuals is complicated because it would vary with what they buy and where they shop. Major categories of expenses for most households, including rent and mortgage payments, groceries, utilities and child care, are exempt from sales tax in California, while goods, other than cars and trucks, purchased in other counties or in Nevada would be subject to those areas’ sales taxes, rather than Plumas County’s. Chairwoman Hall noted in an email that households that cook at home and buy mainly essentials, like food and medicine, would likely pay very little, while people with more disposable income who eat out and buy consumer products, alcohol, and tobacco would pay more.

Data on annual budgets for Plumas County households from the Economic Policy Institute suggest that a 1% sales tax on applicable purchases could increase monthly expenses by about $4.00 for a single adult to $7.60 for a family of four. Data from the federal Bureau of Labor Statistics Consumer Expenditure Survey for California, which includes purchases of vehicles and major appliances, suggest somewhat larger increases, on the order of $6 to $9 per month.

The Board of Supervisors has pointed out that nearby cities where county residents often shop, including Chico, Grass Valley, Truckee, Susanville, and Reno, all have sales taxes equal to or higher than the 8.25% proposed under Measure B. However, Mr Roberti said that, if cities aren’t counted, the sales tax in 17 northern California counties (except Butte and Humboldt, where the sales tax is 8.25%) is the same as the current rate in Plumas County and asked: “What are we not doing right…that we need to raise ours?”

Mr Roberti also expressed concern about what he called an “inflationary” effect of the proposed increase, which would result from higher costs for goods being passed on throughout the economy. As a result, he said, the total cost of the levy would exceed the $3 million the county would receive. The effect wouldn’t be huge, “but it’s going to be there,” he said.

Opponents of Measure B have also said the county should address its financial issues before raising taxes: Mr Roberti said that increasing taxes first “takes away any incentive for real financial reform.” Chairwoman Hall countered that “good governance requires ensuring that core services remain stable and reliable while improvements are being made” and that Measure B is designed to do that. And, she said, because the increase is time-limited, the county must adopt reforms, because it can’t rely on the added revenue indefinitely.

Chairwoman Hall also addressed opponents’ charges that accountability for use of the funds is lacking. She pointed out that county budgets must be presented in open meetings that allow public participation and comment. The county’s budgets are also displayed online in Open Gov, which the public can access and search.

If Measure B doesn’t pass, the county would have to find other sources of revenue or cut back services. Counties have few options besides the sales tax for increasing revenue, however. Plumas County’s schedule of fees is being reviewed to ensure that the fees charged are in line with the cost of providing the services they cover—a process that the Board of Supervisors and the measure’s opponents both endorse. A special tax on real estate parcels is a second option, but it would be paid only by property owners, rather than by everyone, as with a sales tax.