Sales Taxes Are a Big Part of Our City's Revenue Base
In addition to a penny per dollar of sales taxes the city receives under state law, the city receives another one cent (1%) in tax revenues from add-on sales taxes authorized by Davis voters. As can be seen in the two graphics below, sales taxes are more than a fourth of the city's General Fund monies used to support the services and programs you expect everyday as Davis residents -- fire, police, park and recreation programs, maintenance of our roads and bike paths. In the wake of past state actions to divert property tax revenues from local government, cities like Davis have very few revenue options to meet their local needs. Sales taxes are necessary to provide the services that benefit us all.
A Loss of Sales Taxes Would Cripple City Finances
In order to be proper stewards of taxpayer money, the city plans way ahead -- it creates a 20-year forecast to see how revenues line up with program costs, including public safety and parks and recreation services and such costs as employee compensation, employee pensions, and maintenance of our streets, bike paths, parks, and city buildings.
The most recent forecast included in the 2019-20 budget plan indicates that the city faces serious fiscal challenges but would be able to maintain operating reserves in the 5 percent to 15 percent range over that period. The city would still have serious financial problems to address because we would fall short of the money needed to maintain our infrastructure. (We are actively pursuing economic development, cost-cutting strategies, and other actions to close this financial gap.)
But, as the graphic below shows, the city the situation would be much, much worse if our add-on sales taxes are not renewed by voters in the March 2020 election. We would be crippled financially -- racking up cumulative financial losses approaching $150 million that would leave the city insolvent absent other actions to find new revenues or reduce city services and programs.
Stated simply, our city can't make it financially over the long-term without your help.
Paid for by Renew Davis Committee, A Ballot Committee in Support of Measure Q
FPPC ID# 1418717.