Wednesday, Aug. 20, 2008

Gustine hopes voters OK budget-boosting tax hike

By SCOTT JASON
sjason@mercedsun-star.com

GUSTINE -- City leaders are pitching a three-quarter-cent sales tax hike to bandage a bleeding budget.

Voters will decide the fate of the Gustine Vital City Services Protection Measure on the Nov. 4 ballot. The money would go into the city's general fund to bridge the gap caused by shrinking revenues, disappearing state grants and higher costs.

The effort is similar to the half-cent sales tax increase passed by 64 percent of Merced voters in 2005. It's expected to add about $5 million to this year's budget and more than $130 million during its 20-year life span.

A similar measure in 2004 -- after the shooting death of Merced Police Department Officer Stephan Gray -- failed because the money was earmarked for the police and fire departments and didn't win the two-thirds vote needed to pass.

Gustine's effort would only take a simple majority because the money is not committed to one cause and could help the entire city.

Mayor Rich Ford said he's been explaining the city's tough economic situation to citizens, who he thinks -- and hopes -- will support the tax.

"(Residents) like not having a big community, and they're willing to pay extra for the services they want," he said.

City Manager Margaret Silveira said there's about a $300,000 gap in funding being bridged by the general fund reserve, which is only a Band-Aid. The reserve money will last one year before being depleted.

Gustine took a double hit this year on its bottom line. The decrease in revenue came in the final year of a police union contract that raised their salaries. Two police officer positions are already frozen, she said. That leaves nine officers, including the chief, in the department.

"We wouldn't want to cut back any more," she said. "It'd be cutting to the bone at this point."

Based on current sales tax returns, the city can expect to collect an additional $180,000, which would fill both police positions, if the measure passes. If it doesn't, the city will take a hard look at expenses in January.

The notion for a tax gained momentum when the city realized cash would be short this year. "We couldn't see when the future will bring more revenues to offset the costs," Silveira said.

She points to one promising sign for strong support for more taxes even in an economy that's causing people to pinch pennies.

The city sent comment cards to all residents; about half were returned.

The most pressing concern? Fighting gangs and city security.

Reporter Scott Jason can be reached at (209) 385-2453 or sjason@mercedsun-star.com.