Sales tax increase on front burner | TahoeDailyTribune.com

Sales tax increase on front burner

Susan Wood

The South Lake Tahoe City Council took the next step Tuesday in getting a proposed sales tax hike on a seemingly crowded Nov. 2 ballot.

The council approved an ordinance in a 4-0 vote, with Councilman Hal Cole absent during its regular meeting, to let El Dorado County know of the city’s intentions.

The city is mulling over four options consisting of a quarter- to 1-percent raise in the 7.25 percent sales tax paid on retail goods. It’s estimated the latter would put another $4 million into the city’s general fund.

Currently, the city collects about that much from the state’s sales tax.

If the tax goes up to 8.25 percent, for example, a $20,000 vehicle will cost another $200. Upon passage, it would be effective April 1 – with no sunset provision at this point.

The panel should determine the extent of the tax hike by May 6.

Beforehand, the City Council wants to get results of a community survey recently sent to about 1,000 registered voters in the city. The survey asks residents to rate the most critical issues facing the city. It also inquires about whether the community would support a hike in the sales tax or the motel-room tax.

In addition, the council considered how Tahoe visitors would accept its plans.

Supporting one of the four proposals, Councilwoman Kathay Lovell, used her experience as a shopper to justify whether the hike may be accepted or not.

With South Lake Tahoe’s sales tax lower than areas such as San Francisco, Lovell said “visitors are accustomed to those higher sales taxes.”

Mayor Tom Davis said voters are more apt to support higher taxes if they “just see it’s not going into a black hole.”

Davis also called for the city to reconvene the community coalition that helped spearhead the successful passage a few years ago of Measure Z, the ballot initiative that raised the motel room tax guests pay by $1.50.

The coalition consisted of the South Lake Tahoe Chamber of Commerce, Lodging Association, senior citizen groups as well as police and fire unions.

As far as a meeting of the minds with Clean Tahoe, the City Council also decided Tuesday morning to delay changes in the fee structure that pays for litter abatement until it has a joint meeting with the cooperative program’s board. Clean Tahoe’s board of directors meets April 20. It expects to meet with the city afterward.

And baby steps were taken Tuesday by the South Tahoe Redevelopment Agency, which serves as the council, to move ahead with the convention center project.

The city’s agency still has no exclusive negotiating agreement with developers on Redevelopment Project 3. However, parties of interest have come forward. They include Marriott, Sierra Shirts owner Harry Segal with his partners and the Chen Family, who own the Holiday Lodge.

Of the 71 letters sent out by the city, it received 30 responses from property owners in the area, who declared interest in having the project built across from Heavenly Village.

The originally estimated $250 million project area covers a 16-acre wedge between Highway 50 and Cedar and Stateline avenues and the Stardust Lodge to the west.

The action was necessary as the project appears to be changing in scope and the city needs financial partners to pick up the tab.

Segal said financial commitments between interested developers have not been worked out yet – but that hasn’t hindered interest.

“The key to redevelopment being successful is the convention center. It will bring in the midweek business this town needs,” he said after the council meeting.

Business owners are also seeking help in the shoulder seasons, considered April-May and September-October. Conventions are often slated for this time of year.

– Susan Wood can be reached at (530) 542-8009 or via e-mail at swood@tahoedailytribune.com


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