CC 06-02-2020 Item No. 18 Tax Measure Polling and Strategy for November 2020 ballot_Staff PresentationJune 2, 2020
Tax Measure Polling and Strategy
CC 06-02-2020 Item No. 18
Background
●Property tax increases from
6.25% to 7.0%
●Transient occupancy tax
(TOT) increased from 10% to
12% in 2012
●Sales tax increases through
localization agreements
Current Status
●COVID-19
●Sharp revenue declines
●Recessionary period
●Structural deficit
●Capital financing
Tax Measures -TOT
Pros Cons
$1.7M annually May not be sufficient to help
General Fund long-term
Paid by non-residents Increase would make City
one of the highest in region
Relatively high approval
rates
Tax Measures –Transaction
and Use Tax (TUT)
Pros Cons
$3M-$4M annually Sales tax correlated with
overall economic trends
Maintains local control TUT not applicable to B2B
City remains fairly
proportional
Affects up to 60% of sales tax
base
Burden spread across
residents, businesses, visitors
Burden spread across
residents, businesses, visitors
Tax Measures –Parcel Tax
Pros Cons
$3.6M annually Flat rate often
considered regressive
Not impacted by
economic downturns
Variable rate has larger
impact on
commercial/office/
industrial
Flexibility in
design/structure
Burden confined to
residents and businesses
Tax Measures –Utility Users
Tax (UUT)
Pros Cons
$1.3M for 1% increase Forecast revenues show
no or declining growth
Less volatile to economic
declines
Success rates are lower
Not a strong deterrent to
business compared to
other regions
Doubling the current 2.4%
rate would put City atop
of regional range
Tax Measures –Business Tax
(Head Tax)
Pros Cons
Generate largest amount of
annual revenue ($8M-$10M)
Would require a tiered
application to businesses
Less impacted by overall
economic trends
Commonly said to be a tax
on jobs that could impact
prospect in community
Inflationary indices may be
applied
Timeline to November 2020 Ballot
Date Action
Week of June 1st Contract award
Week of June 1st Project kick-off
Week of June 8th Finalize survey, conduct polling
Week of June 23rd Process and weight data
July 7th Presentation to Council
July to mid-August Public information dissemination
July 21st 1st Reading of Ordinance
August 4th 2nd Reading of Ordinance
August 7th Registrar of Voters deadline
August 18th Submittal of impartial analysis
November 3rd Election Day
Staff Recommendation
1. Provide direction to move forward
with a polling and strategy firm to
explore transient occupancy tax (TOT)
measure for the November 2020 ballot
2. Approve a budget adjustment of
$55,000 to retain polling and strategy
firm
Questions?