Fairfax Delays Decision on Sales Tax, Budget

The Fairfax Town Council Wednesday night decided to delay a decision on a after opposition to a one percent tax was arose.

The council will decide at a special meeting on July 27 about putting either a 0.5 percent or one percent tax on the ballot in November. A revised 2011-12 budget, which attempts to deal with a $267,000 deficit, will also be reviewed again at that meeting.

On everyone’s minds was an ongoing revenue problem within the town.

“We need to decrease our expenditures, which we’ve been doing for four straight years, but we also need to increase our revenue,” said Town Manager Michael Rock. “There will be a structural deficit even with concessions from employees and even with a possible local sales tax measure.”

The town’s property tax revenue has decreased nearly $300,000 over the last four years, largely because of downward reassessments. In addition, state funding for different programs has also decreased.

Some good news came in the fact that the state would not be taking $100,000 in COPS funding – state funds for local policing. The state would be taking $21,000 in motor vehicle fees, however, and the COPS funding would go away next year.

Because of that additional revenue, the town budget deficit for next year – which had been $350,000 – is only $267,000. 

The proposed budget attempts to close that deficit with $45,000 in saving from leaving positions vacant – public works director, a police officer, maintenance worker, administrative assistance – and another $50,000 in operational budget cuts. The remainder would come from reserves.

Negotiations are still ongoing with the labor bargaining units, though, and some more cost-saving measures in the form of concessions from employees are expected before the budget is approved in August.

The council members all pointed out that, although are a problem that needs addressing, the employees can’t take all the cuts and they all work hard for the town.

“It hasn’t been said yet, and it should be, our employees are the lowest paid in the county,” said Tremaine.

The questions about employee costs and pensions came up again from the informal Sustainable Budget Committee, a group of businessmen led by Garry Graham, owner of .

Graham said the group is ready to “really look under the hood” of the budget. 

Putting on a different hat, not representing the committee, Graham also voiced displeasure about the prospect of a one percent sales tax.

Previously, the town had held a number of meetings about the possibility of a local sales tax, but had primarily been considering a 0.5 percent tax. With the state tax falling back one percent on July 1, because the legislature opted not to go to voters to extend a temporary increase, the council felt a one percent local tax made sense now. 

“This is the biggest money grab I’ve seen from a council,” said Graham, who said he would lose $6,000 a year at 19 Broadway from the tax and that all the businesses in town were struggling. “You’re doing the absolutely wrong thing.”

Wendy Baker, executive director of the , said that businesses owners would be surprised by the change from a 0.5 to one percent sales tax.

Baker also read some informal survey results of business owners, though she said the survey was in reference to a 0.5 percent tax. Of the 35 business owners that responded, 59 percent said they were in favor of a tax. 

A one percent sales tax would generate roughly $300,000 for the town. It would need a simple majority to pass at the ballot box.

Council members also expressed their belief that it would be a way to capitalize on the number of tourists that pass through town without hurting residents as much as with a property tax. 

There were enough questions that the council decided to determine the amount of the possible local sales tax at the special meeting on July 27.

“I don’t feel comfortable making the decision tonight,” said Mayor Larry Bragman.

At the July 27 meeting, the council will also vote on paying out-of-pocket the $24 per month that is paid by the town per council member for their retirement. All the council members said they were not aware that money was being paid to CalPERS on their behalf.