Folsom City Council votes to 'bring back' 2024 sales tax ballot measure

With a mountain of fiscal challenges presented Tuesday night, the Folsom City Council reluctantly voted 3-2 for staff to "bring back" a one-cent sales tax increase proposal for the 2024 ballot. City Manager Elaine Andersen made a compelling case for the sales tax to handle mounting deficits facing the city. Andersen cited concerns over inflation, police and fire department cutbacks, low reserves, years of deferred maintenance around the city and other grim fiscal details. While the city has "done well with what we have" in revenue, staff sees a "structural deficit" in the millions of dollars over the next five years. Folsom staff estimates a 1-percent local sales tax would initially generate about $22 million a year until and unless repealed by voters. "No one likes a tax increase, but we have a compelling case in front of us," Folsom Councilmember YK Chalamcherla said. "Desperate times call for desperate measures," Folsom resident Doug Scalzi said from the floor Tuesday. City staff completed a comprehensive outreach on the fiscal challenges in 2022, and experts said community engagement was rated remarkably high compared to other jurisdictions. Staff then presented ballot "language" for a local sales tax measure to the City Council in July 2022 for consideration on the November 2022 ballot. The City Council declined. Folsom's cumulative tax rate on retail sales currently stands at the base rate of 7.25 percent – plus an additional .5 percent for Measure A transportation uses – for a total of 7.75 percent of purchase price, officials said. If Folsom voters approve a local sales tax measure, 100 percent of the revenue would go to the city of Folsom, and revenue would not be shared with other agencies, staff explained. A successful sales tax measure raising Folsom's rate by 1 percent would increase the cumulative tax rate to 8.75 percent, and Folsom's share of the purchase price would increase from 1 percent to 2 percent. Estimates show about 40 percent of sales tax is paid by non-residents, staff added. In Sacramento County, the cities of Galt (9.25 percent) Rancho Cordova (8.75), Elk Grove (8.75) and Sacramento (8.75) all have at least a 1 percent local sales tax in place. Citrus Heights remains at 7.75 percent alongside Folsom. "Folsom is a gem, but a declining gem," said Bruce Cline, former Folsom City Attorney. General vs. special tax After 19 speakers spoke in favor of a tax increase Tuesday evening at the regular council meeting, three possible sales tax scenarios emerged. The council voted for staff to bring back "language" by January for both a general sales tax and a "special tax" measure focusing on public safety. A general tax would need a simple majority vote to pass, or 50 percent plus one, while a special tax initiated by the city would need a two-thirds vote, staff explained. Meanwhile, Folsom resident Robert Goss also announced residents are rallying for a possible "citizens' initiative" for a special tax pushed by "Folsom Residents for Public Safety and Quality of Life." A special tax initiative authored by citizens rather than the city would only require a "50 plus 1" simple majority vote to pass, officials said. Goss said the citizens' initiative would focus on funding the fire department, police, transportation (roads) and parks. Staff said the council could decide to stand by and let the citizens' initiative run its course. The dissenting votes came from council persons Anna Rohrbough and Chalamcherla, who preferred to focus on a special tax. "I can't get on board for a general tax, but I can support a special tax," Rohrbough said. "We have been working with a mandate to do what we can with what we have," Councilmember Mike Kozlowski said. "We've reached a point where dollars have been stretched to the limit. We're out of time to make a decision."