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County will explore city’s sales tax increase proposal

May 9, 2014

George Moniz of Nevada made a trip into Bishop Friday to shop for new furniture. Currently, the City of Bishop and Inyo County are weighing the pros and cons of a half-percent countywide Transaction Use Tax increase. If approved, the tax will be a full 1 percent. Photo by Mike Gervais

Inyo County is exploring the idea of partnering with the City of Bishop to raise the county’s Transaction and Use Tax from .05 percent to 1 percent to increase revenue for public services.
Bishop City Administrator Keith Caldwell went before the Board of Supervisors Tuesday to discuss the potential partnership. Caldwell also said that if the county doesn’t have an interest in raising the TUT county-wide, the city could pursue a Bishop-specific increase.
But before local leaders can start counting the income, the proposed tax hike must be approved by voters. Caldwell said the city hopes to have an initiative on the Nov. 4 ballot.
“Over the last year or so, we’ve been holding budget retreats to talk about economic sustainability,” Caldwell told the board, explaining that the half-percent increase could bring a half million dollars into the city’s budget.
The current .05 percent TUT that is charged countywide is divided between the city and county. Bishop, which is responsible for about one-third of the TUT revenue, receives one-third of the TUT proceeds.
For the 2012-13 fiscal year, the TUT generated a total of $1,847,081, with just under $1.3 million going to the county and $554,124 going to the city.
Doubling the tax, Caldwell said, means doubling the revenue.
Caldwell said the city could expect to see between $1.1 million and $1.3 million if the tax is approved by voters. The county would be looking at between $2.1 million and $2.3 million. (A typo in The Inyo Register’s Tuesday, May 6, 2014 article “City wants to partner with county on sales tax increase” stated that the city expected to see $7.1 million from the increase.)
“The numbers are very steady, there’s not a lot of fluctuation year-to-year,” Caldwell told the board on Tuesday, explaining that the revenue estimates should prove true if the tax is approved by voters.
Third District Supervisor and Board Chair Rick Pucci, who also served as Bishop City administrator for many years before running for county office, said that when the TUT was first proposed in the late 1980s, the county wanted to keep the cost equal across the county. “That made a lot of sense then, and probably will continue to hold,” Pucci said.
Fifth District Supervisor Matt Kingsley asked if the city and county would maintain the same split, with the city taking a third of the tax revenue, if a countywide increase is approved. Caldwell said that is the plan.
Kingsley also wanted to know what nearby counties are charging for a TUT. Caldwell said that he didn’t have that information readily available, but he believes Inyo is about on par with nearby counties in the state.
The board directed county staff to look into what other counties charge for the TUT, and return later this month to discuss the proposal.
“We request the board consider this as soon as possible,” Caldwell said, explaining that the city needs time to draft a ballot measure before the November election. “We want to move forward as soon as possible.”
County Administrative Officer Kevin Carunchio said that he believes the proposed increase could get voter approval in November. “Most of the population is familiar and comfortable with where the money is going,” Carunchio said, pointing out that the county is currently struggling with a budget deficit in its solid waste program, which is traditionally where TUT tax revenue is spent within the county.
Caldwell said the city generally earmarks its TUT funds to support the Bishop Police and Fire departments.
The board is scheduled to discuss the proposed tax increase further at either its Tuesday, May 20 or Tuesday, May 27 meeting.

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