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County rejects tax hike idea

June 27, 2014

County leaders decided Tuesday to tackle their financial issues with creative budget measures rather than placing the burden on tax payers.
They came to this conclusion in response to a request from the City of Bishop to consider raising the county Transaction Use Tax.
The Board of Supervisors unanimously agreed that a “tax and spend” policy would not be in the best interest of county residents in a time when county department heads have been tasked with trimming $1.06 million from the overall county budget.
Back in May, Bishop City Administrator Keith Caldwell went before the Board of Supervisors, asking the county to consider an increase in its TUT. Caldwell explained that the tax increase is something the Bishop City Council is considering placing on the November ballot.
Currently, the city and county each collect a half percent sales tax, splitting the revenue. Under the current formula, the county collects 70 percent of the proceeds from the tax, and the city collects 30 percent.
At Tuesday’s meeting, County Administrative Officer Kevin Carunchio said that 31.4 percent of the tax is collected in the city limits, so the formula used to divide the funds is fair.
The TUT is a general tax, and the city and county can choose to use the funds for a variety of purposes. The city, for example, uses its TUT revenue for Parks and Recreation projects. The county has traditionally used the TUT to help fund its solid waste department.
Carunchio said the county does have the option of using the funds for other departments, such as Criminal Justice.
Carunchio explained to the board that a TUT increase must be approved by the voters in a general election. He said that if the board decided not to place the increase on the ballot this year, it would have to wait another two years to pass it.
Carunchio said that he would “probably recommend against” the tax increase until the county can balances its books.
Carunchio added that the county does not have to participate for the city to move forward with a TUT increase. If the city does opt to put an increase on the ballot, and if it is approved by the voters, Carunchio said the city would simply collect the tax on its own.
The board agreed.
“I don’t know that there’s a whole lot of appetite among voters for a TUT increase,” Second District Supervisor Jeff Griffiths said. “… This is not the time to do it.”
First District Supervisor Linda Arcularius pointed out that Inyo’s current tax rate is in line with other counties in the state, while a number of cities have higher rates. She added that voters have the opportunity of having the increase put on the ballot if that is what they want.
Fourth District Supervisor Mark Tillemans said that the Lone Pine Fire District is trying to fix a cash-flow problem, and hopes to have a tax increase on the November ballot. He explained that he doesn’t want a county increase to compete wiht the fire district. “I don’t think that’s what I got elected to do,” Tillemans said, adding that “it’s important that we address our structural deficit” without laying the burden on the taxpayers.
Third District Supervisor and Board Chair Rick Pucci agreed. “We as a county need to do our job first,” Pucci said, adding that once the structural deficit is fixed, the county can consider a tax increase if it is the will of the voters.
Fifth District Supervisor Matt Kingsley said that the TUT increase has “more public support” than anticipated, but he does not feel that it’s the right time for the county to place the measure on the ballot.
Caldwell said Thursday that the Bishop City Council will decide if it wants to proceed with a city-only TUT increase proposal on the November ballot at its Monday, July 14 Study Session. “If we move forward, I believe the deadline is Aug. 8 to get it on the ballot,” Caldwell said, adding that the city may be considering a 1 percent tax increase.
“I look forward to the 14th and seeing where the council wants to go,” Caldwell said. “We should have a decision that night because we have to move forward.”

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