Merced City Council hears double tax study results

The majority of downtown shop owners support the double tax they pay for doing business in the area but not how it’s spent, according to a recent study.

The city commissioned the study from Merced-based Alliance for Community Research and Development, which found 56 percent of business owners approve of the tax with some modifications. Thirty percent would leave it as it is, and 14 percent would ax the whole thing.

Those were just some of the findings presented to the City Council at a study session held before Tuesday night’s regular meeting.

Alliance used focus groups and surveys to gather answers to its questions. Three focus groups were held, one each for businesses in the east, west and central, or “core,” sections of downtown.

The report stated that all 544 of the businesses were asked by mail to fill out an online survey during summer 2013, but just 60 completed it. Steve Roussos, director of Alliance, said those numbers are representative.

“(That’s) about 11 percent. That’s not much different than other studies that were done in prior years,” Roussos said.

“Without any incentives, where you’re not paying anybody, around 10 percent isn’t bad,” he said.

Merced’s downtown is the area between G and V streets, the Union Pacific railroad tracks and the alley north of 19th Street. The 544 businesses in that area pay double taxes on their business licenses and the money is pooled into a downtown fund.

Since 1970, the double tax has been designated to improve Merced’s downtown through capital improvements, administration, promotions and other uses as approved by the City Council.

Roussos said the report found that the shop owners’ top priorities for use of the double tax are communitywide events, maintenance and security.

One downtown business owner who attended the study session said the survey was not representative and not specific. Kevin Hammon, owner of Binary Systems Computer Repair on Main Street, said the questions were too vague because most business owners have never been shown the budget for the downtown tax, which generates between $60,000 and $85,000 a year.

For example, Hammon pointed to the questions about communitywide events. The questions don’t separate events and show how much money each gets from the fund.

“How can I properly give feedback to the city?” Hammon said. “I can’t give them feedback to what they’re spending the money on.”

Greater transparency could allow owners to work with the city to decide where the money is spent, he said.

John Cardenas, president of Merced County’s Multi-Cultural Chamber of Commerce, was also at Tuesday’s meeting. He said many business owners in the area agree with Hammon – they want to see where the money is going.

Cardenas is spearheading a downtown business association that he would like to see work with city staff and the Downtown Steering Committee. “We live here and we’re business owners,” Cardenas said. “We’re committed to downtown. That’s our area.”

The steering committee advises the City Council on how to spend the money. Maria Mendoza, development associate with the city, said the committee is being “restructured.” She said city staff wants to add more business owners to the committee and have the group meet more often than quarterly.

An additional survey of UC Merced students found they want to see “safety, security and beautification” in the downtown, which they called a “scary” place.

The City Council will hear more on the report during another study session before the next regular meeting on Feb. 3.

The full report is available at www.cityofmerced.org.