Merced set for tax-sharing talk

The lack of a tax-sharing agreement between the city of Merced and Merced County will be the focus of the first City Council meeting of May.

The regular council meeting, which also will touch on a proposed half-cent sales tax, is at 7 p.m. Monday at City Hall, 678 W. 18th St.

The city of Merced in April formally ended talks with Merced County representatives, citing a lack of progress over the perpetual dispute that affects the ability to annex land along borders, according to the city leaders.

The last agreement ended in 2014, but city and county representatives have been discussing a new deal for a decade, leaders said. City Manager Steve Carrigan has said he’s going to recommend that the City Council call for a mediator to hash out the deal, or pick another route to get the work done.

City leaders have argued that the lack of an agreement impedes their ability to annex land near UC Merced, which would be developed to service the retail and housing needs of the campus community.

Beyond annexing land, the agreement would determine where the tax dollars go that are generated on the land.

The tax split takes into account dollars that go into the county’s fire services, as well as money the state takes from the county to put into schools, according to records. Merced’s leaders say they’ve offered an agreement that works out to a 50-50 split, but the county wants an agreement that sends 73 percent to the county and 27 percent to the city, according to a news release.

The council was set to make its decision at the last meeting in April, but bumped the decision to Monday’s meeting.

County leaders said Merced is the largest user of several county services but doesn’t produce the tax dollars that pay for them. Those leaders insist their offer to the city is fair.

Negotiations have stalled over the years as they were put on hold during election season, according to county leaders.

At the same meeting Monday, the council is set to discuss the half-cent sales tax that’s making its rounds in the county. Last week, both Atwater and Merced County voted to put the measure on the November ballot.

Advocates maintain that if the proposal wins 67 percent of voter approval, it would raise $450 million countywide over 30 years for local and regional transportation projects.

The council is also set to receive a draft copy of the 2016-17 budget.

This story was originally published May 1, 2016 at 3:38 PM with the headline "Merced set for tax-sharing talk."