On May 17, 2005, the City Council received a report regarding its options for placing a tax measure before the City’s voters to generate sufficient revenue to maintain minimal levels of service for the public welfare. Members of the public reiterated their support for such a measure, indicating that the community would suffer if services were further curtailed.
On June 7 and June 14, 2005, the Council reviewed and approved the FY 2005-06 budget, and confirmed the on-going reductions in services previously approved. On July 12, 2005, the Council adopted a resolution calling for an election to take place on November 8, 2005 to ask City voters to approve a half-cent transactions and use tax. The proposed tax measure also included a ten (10) year sunset provision and mandated the appointment of an independent committee with authority to both recommend the use of the tax revenue and provide oversight as to the use of funds.
On November 8, 2005, the voters of Salinas approved (61.74%) the ordinance establishing a Temporary Transactions and Use Tax at the rate of one-half of one percent (0.50%) to be in effect for a period of ten (10) years. Initial collection of the tax began April 1, 2006 with the first receipt of revenues from the tax to occur in July 2006. The temporary tax was therefore scheduled to sunset April 1, 2016. During November 2012, Salinas’ residents approved the renewal of the transaction and use tax with no expiration date by removing the language addressing a tax collection sunset in April 2016.
The tax approved by the voters is a general tax. As such, the City may use the revenue from the tax for any general governmental purpose, including without limitation police, fire safety, paramedics, libraries, crossing guards, graffiti removal, anti-gang programs, and street and park maintenance.
In order to assure full compliance with the intent of the ordinance, the tax proceeds from this ordinance are separately received and accounted for in the City’s financial reporting system (Fund 1100). The Finance Director reports at least quarterly to the Oversight Committee the use of tax proceeds. The Oversight Committee reports annually to the City Council regarding the use of tax proceeds.