HomeMy WebLinkAbout1986-05-20; City Council; 8630; Local Sales Tax MeasureI
S
0
a
z
00
OF CARLSBAD -- AGENL-., BILL
AB#_�_3,n_ I TITLE:
MTG.,5 / 2__ ,_. 0 / 86
DEPT._ C_M
RECOMMENDED ACTION:
LOCAL SALES TAX MEASURE
DEPT. HD.,
CITY ATTY.
CITY M5
If desired, instruct the Mayor as SANDAG Director to support a
one-half percent sales tax increase for local transportation
improvements.
BACKGROUND:
The SANDAG Board will vote May 23, 1986, on a proposal to
increase the current 6 percent sales tax to 61 percent. The
added money would be distributed to cities and the County for
road and local transit purposes. A detailed report on the
measure is attached.
FISCAL IMPACT:
Carlsbad now receives $538,350 in gas tax funds to maintain
over 144 mile local street system. This proposal would add
$613,309 annually for streets.
EXHIBITS:
I."SANDAG Report - Transportation Financing Advisory Committee:
Recommendation on Transportation Sales Tax Ballot Measure
San Diego Association of Governments
BOARD OF DIRECTORS
April 25, 1986 AGENDA REPORT No.:R-35
TRANSPORTATION FINANCING ADVISORY COMMITTEE
(TFAC): RECOMMENDATION ON TRANSPORTATION
SALES TAX BALLOT MEASURE
i
} On March 28, 1986, the Transportation Financing Advisory Committee (TFAC) met
to discuss its recommendation to the Board regarding the local sales tax measure
for transportation purposes. Several members of the Committee and other inter"
ested individuals discussed positions taken to date, which are summar_zed in
Attachment 1. After considerable discussion, the TFAC approved the staff recom-
mendation regarding the local sales tax measure for the purpose of sending the
1 recommendation on to the Board to be accepted for distribution to all local juris-
dictions and other interested agencies and groups for review and comment.
The staff recommendation was for a 1/2% local sales tax for a duration of 20 years,
with 1/3 of the revenues (1/61/o) being allocated for local street and road purposes,
1/3 for transit purposes, and 1/3 for highway purposes. This recommendation was
based on technical needs analyses, citizen attitudes, and the experience of other
areas in implementing local sales tax measures. In addition, a draft local sales tax
ordinance has been developed (Attachment 2) which contains the details involved in
implementing a local sales tax including allocation formulae, various requirements
and the expenditure plan.
In a previous action, the TFAC recommended proceeding with November. 1986 as
the target election date. In order to meet the various deadlines related to a
November election, the staff is recommending that the recommendation regarding
the local sales tax, as contained in the draft tax ordinance, be accepted for distri-
bution. Final action by the Board, acting as the San Diego County Regional
Transportation Commission, to approve the tax ordinance and ballot proposition
language and to call for the election should be scheduled as soon as possible after a
reasonable review and comment period. The earlier action is taken to call for the
election, the more time will be available for a campaign to be organized and con-
ducted. The discussion section contains a summary of the process followed by
TFAC in coming to its current position regarding the local sales tax measure. It is
my
RECOMMENDATION
that the SANDAG Board of Directors, acting as the San Diego County Regional
Transportation Commission, accept the recommendation forwarded by the Trans-
portation Financing Advisory Committee (TFAC) -- a 1/2% local sales tax for 20
years with local streets and roads, transit, and highways each to receive 1/3 of the
revenues -- as well as the draft tax ordinance (Attachment 2) for distribution to
local jurisdictions and other interested agencies and groups for review and com-
ment. It is also recommended that the November, 1986 election date be approved
EXHIBIT 1
in principle, with the final ballot proposition and tax ordinance language to be
approved following the review period.
Discussion
I. Background
The need for additional local revenues was identified in the 1984 Regional Trans-
portation Plan (RTP) which indicated a significant shortfall in the funds needed to
implement the recommended transit, state highway, and local street and road
improvements. The RTP actions focused on the evaluation of all potential revenue
sources and, if voter approval of a long-range funding problem was determined to
be required, the initiation of activities necessary to place a funding measure on the
ballot by the end of 1986.
In response to the identified local needs, a series of statewide transportation needs
studies, and major transportation financing legislative proposals, the SANDAL
Board of Directors appointed a Transportation Financing Advisory Committee
(TFAC) in January 1985. The TFAC consisted of an elected official from each of
the sixteen cities in the region and the County of San Diego, as well as resource
members from the San Diego Taxpayers Association, the League of Women Voters,
the Greater San Diego Chamber of Commerce, the San Diego Highway Develop-
ment Association, the North County Transportation Coalition, and CALTRANS.
The objective of TFAC was to review the region's transportation financing needs
k and to make recommendations to the SANDAG Board of Directors on actions neces-
sary to meet the identified needs. The TFAC has been meeting since March 1985 in
an effort to resolve the region's transportation funding problems.
2- Transportation Needs Analysis
Tire Committee began its efforts by reviewing the region's needs for transit, state
highway, and local street and road improvements and the revenues available to
meet the identified needs. These needs estimates have been refined and updated
over the last year based on considerable input from SANDAG's technical commit-
tees, the transit operators, CALTRANS, and the local jurisdictions. The results of
this p;•ocess have been reflected in the cost and revenue estimates contained in the
draft 1986 RTP. As shown on the table below, the total costs of the recommended
transit, state highway, and local street and road improvements over the next
twenty years exceed $9.9 billion, with only $5.4 billion in local, state, and federal
revenues projected over the same period -- leaving a shortfall in funding of over
$4.5-billion.
Transportation Needs Summary
(In Millions of 1985 Dollars)
Costs
Revenues
Shortfall
Highways $2,800
$1,635
$1,165
Local Streets & Roads $3,700
$1,310
$2,390
Transit $3,470
$2,455
$1,015
Total $9,970
$5,400
$4,570
N
3. Review of Alternative Revenue Sources
Confronted with a shortfall of this magnitude, the TFAC reviewed the potential of
increased state and federal revenues making up the difference. Upon consideration
of the major funding shortfall in the state highway program, the continuing delays
in the implementation of important state highway projects, the lack of successful
efforts to obtain a significant increase in the gas tax for highway and local street
and road projects, and the on -going cutbacks in federal transportation funding in
the federal government's effort to reduce the nation's growing budget deficit, the
TFAC determined that it was unlikely that any significant portion of the region's
unmet needs would be met by increased state or federal revenues. In addition,
given the dramatic fluctuations in state and federal funding in recent years and the
great degree of uncertainty surrounding the future of many of the traditional state
and federal transportation programs, the TFAC felt that a reliable, stable, and
predictable local source of funding was necessary to provide the foundation for a
long-range financing program to implement the region's needed transportation
improvements.
The TFAC then turned its attention to alternative local funding sources. A number
of sources were evaluated including a local sales tax, a local gas tax, a local payroll
tax, developer fees and charges, benefit assessment districts, and tax increment
financing. Overall, the local sales tax was considered to be the most appropriate
source because it has the ability to generate the level of revenues necessary to
meet the region's needs and because it grows with inflation, population growth, and
income growth. An increase in the gas tax was not favored because it does not
increase with inflation, causing the buying power of the gas tax to decline signif-
icantly over a long period of time. In addition, a gallonage based gas tax .fails to
keep pace with the increase in travel demand due to increasing vehicle fuel effi-
ciency. For example, in order to generate the same amount of funds over a 20-year
period as a 1 M sales tax, the gas tax would have to be raised by 20t per gallon.
4. Local Sales Tax Enabling Legislation
In late April 1985, the TFAC recommended to the SANDAG Board of Directors that
enabling Iegislation be pursued to allow a local sales tax measure to be placed on
the ballot. The SANDAG Board of Directors approved the TFAC recommendation,
as well as the draft enabling legislation language developed through the TFAC. The
SANDAG-sponsored bill, SB 361 carried by Senator Deddeh, was eventually passed
by the legislature in September and signed by the Governor in October 1985. The
legislation:
o Creates the San Diego County Regional Transportation Commission, which
would administer the sales tax revenues if the tax increase is approved by a
majority of the voters;
o Designates the SANDAG Board to act as the Commission and to provide staff
to it;
o Authorizes the Commission to determine the rate (up to 1%), purposes, and
term (if any) of the tax to be included in the ballot measure and to have the
County submit the measure of the voters;
3
o Authorizes the Commission to allocate the revenues as per the terms of the
ballot measure; and
o Authorizes the Commission to issue bonds payable from the proceeds of the
tax.
5. Development of a Local Sales Tax Ballot Proposition
The enabling legislation provided the general authority for a local sales tax measure
and TFAC has worked over the last several months to develop a recommendation
regarding key decisions such as the amount and duration of the tax and the specific
uses of the tax revenues. The TFAC focused its efforts on developing a recom-
mended ballot measure proposal which could be agreed to by all the local jurisdic-
tions, could be supported by the public, and which would meet a significant portion
of the region's needs. The TFAC reviewed updated needs information for transit,
state highway, and local street and road improvements, the recent experience of
other areas which have pursued local sales taxes (Los Angeles, Santa Clara, Orange
County, and Phoenix), and the results of two local public opinion surveys regarding
the sales tax concept.
Based on the identified transportation needs, a local sales tax of 3/4% to loo for at
least 20 years is justified. However, based on citizen attitudes, it would appear
that a tv- of 3/41/o or more would probably not achieve a majority level of support.
Although a 1/2010 sales tax would not meet all of the region's needs, it would meet a
significant portion of the needs and would provide a sound foundation for the long-
range financial program necessary to implement the region's needed transportation
improvements. Over 20 years, a 1/2010 local sales tax would provide an estimated
$2.4 billion -(in 1985 dollars), over half of the total estimated shortfall. It would also
signify a major local commitment to providing transportation improvements which
could be used to leverage additional state and federal funds and to attract a greater
amount of private sactor support. A 20-year duration would appear to be necessary
in order to fund a_ significant portion of the region's needs, as well as to provide for
a viable bonding option which could be used to accelerate the implementation of a
greater number of high -priority projects.
Based on these considerations, the TFAC approved sending the SANDAG staff
[ recommendation for a 1/2% sales tax increase for a duration of 20 years with one-
third of the revenues (1/6%) allocated for transit improvements, one-third for local
street and road improvements, and one-third for state highway improvements to the
k SANDAG Board of Directors for the purpose of distribution to all local jurisdictions
and interested parties for review prior to final action on the ballot measure
language.
E
1 KENNETii E. LZ R
Executive Dire
Attachments
ATTACHMENT 1
� w
p a
' at u
V«
.�± p M
Q ,UIV' 0
4 =�.':wMa�°�, "LO►h°��po)-9g< "��yyl� �Cpm ui+uOo
qm,M,Q w ua_k«
"J 16) �,�
t .r w
gaii" ",u ..r m8 'gym a �-" Y"
Qm'E��e� Q�rp'd aAMFYS� b a��b
zy ►� tn.� w t1� gPA W�V 0.Z Rwr� t~nr'F �Ow10 t,
wazw
O O O O O O O O O O O O 0 0 0 0 O O 0 O 0 0
q
z � In ILn
Opp N
a y
-
0S
a�
mA
1N
M N N N p I No
wfn IV
� O
I o
E� w
N O
pj
"e Q
ld
" s.
U N 0 c c u ►� a a, A
aN N
N
N � M
CC D a •» w Y .-. .»
Y
M
QQ
pU
O
0 q � � � Ft ►�
no.
g �7i 0 a > i
w « ' U.
to u
M M * a y J^
ti r; ca v U zMM o d u w o "
6
ATTACHMENT
DRAFT
LOCAL SALES TAX ORDINANCE PRINCIPLES
L Definitions.
A. Commission. Means the San Diego County Regional Transportation
Commission created by Chapter 1576 of the Statutes of 1985 (Division
12.5 of the Public Utilities Code).
B. North County. Means the area within the jurisdiction of the North San
Diego County Transit Development Board.
C. South County. Means the area within the jurisdiction of the San Diego
Metropolitan Transit Development Board.
D. Transit. Means all purposes necessary and convenient to the construc-
tion, operation and maintenance of transit services and facilities in-
cluding the acquisition of vehicles and right of way. Transit services
include, but are not limited to, bus, light rail (trolley) and commuter
rail services and facilities.
E. Local Streets and Roads. Means all purposes necessary and convenient
to the maintenance, operation and construction of local streets and
roads, including interchanges with freeways. Local street and road
purposes shall include all purposes allowable under Article XIX, Section
}
1(a) of the State Constitution.
F. Freeways and Expressways. Means all purposes necessary and conve-
? nient to the design, right-of-way acquisition, and construction of free-
ways and expressways. Freeways and expressways include all State
Highway routes and any other highways so designated in the Expenditure
4 Plan.
G. Expenditure Plan. Means the expenditure plan required by Section
132302 of the Public Utilities Code to be included in the retail trans-
actions and use tax ordinance to be approved by the Commission. The
expenditure plan includes the allocation of revenues for each authorized
purpose.
H. Other.
IL Imposition of Retail Transactions and Use Tax. In addition to any other taxes
authorized by law, there is hereby imposed in the incorporated and unincorpo-
rated territory of the County of San Diego, in accordance with the provisions
of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and
Taxation Code and Public Utilities Code Section 132000 et seq. a transactions
And use tax at the rate of one-half of one percent (1/2%) for 20 years in
addition to any existing or future authorized state or local sales tax or trans-
1
actions and use tax. If, during this time period additional State or Fcderal
fund-. become available which would fund the projects and services contained
in the Regional Transportation Plan, then the tax shall be reduced. A major-
ity vote of the electors of the County of San Diego shall be required to amend
this section.
M. Purpose. The revenues received by the Commission from the imposition of
the retail transactions and use tax shall be used to improve public transpor-
tation countywide as set forth in the Expenditure Plan and consistent with the
Regional Transportation Plan and Regional Transportation Improvement
Program, and for the administration of the San Diego County Regional Trans-
portation Commission Act (hereinafter referred to as the "Act") commencing
with Public Utilities Code Section 132000. After the deduction of adminis-
trative expenses, the revenues shall be allocated as follows:
A. At least one-third for transit improvements;
At least one-third for local street and road improvements; and
Up to one-third for freeway and expressway improvements.
B. The revenues available for transit improvements shall be allocated and
expended pursuant to the following distribution formula and priorities:
1. Transit revenues shall be allocated annually to the Transit
Development Boards on a population basis using Department of
Finance population estimates.
2. Funds shall be expended in accordance with the following prior-
ities:
a. Reduced senior fare guarantee. From the revenues available
i for transit purposes there shall be expended such sums
necessary to guarantee in the North County and South
County areas for the duration of the tax a reduction of at
i least 50°>0 of the average adult full fare for senior (60 years
or older) and disabled riders.
I
! b. The remaining revenues available for transit improvements
! shall be used to implement the Transit Element of the
f Regional Transportation Plan including; the construction of
the rail facilities identified on the map attached to the
Expenditure Plan as Exhibit A.
! C. The revenues available for local streets and roads shall be allocated and
expended pursuant to the following distribution formula and priorities:
F 1. The County and each City shall receive an annual base suns of
I $502000.
2. The remaining revenues after the base sum distribution shall be
t distributed to the County and each City on the following basis:
` a. 2/3 based on total population using Department of Finance
population estimates.
a
I
i 2
b. 1/3 based on maintained street and road mileage.
3. Funds should be expended in accordance with the following priori-
ties:
a. to meet roadway maintenance needs;
b. to reduce congestion and improve safety;
C. for new construction of needed facilities.
D. The revenues available for freeways and expressways •shall be allocated
in accordance with the map attached to the Expenditure Plan as Exhibit
B, subject to the following provisions:
1. The Commission shall make a biennial certification that the San
Diego region has received its fair share of funds available from
the State for highway purposes prior to the allocation of any
revenues to projects on state highway routes. The biennial certi-
fication shall be made as part of the Expenditure Plan update as
provided in Section IV (B).
2. OncC any State Highway facility is constructed, the State shall be
responsible for the maintenance and operation thereof.
3. Any revenues allocated pursuant to this section that are not used
for freeways and expressways shall be redistributed 50% to transit
as provided in Section III (B) and 50°J to streets and roads as
provided in Section M (C)(2).
4. If the Commission bonds for construction of freeway and express-
xpress-
Way facilities, the Commission shall allocate the funds necessary
to meet all debt service requirements prior to considering any
f redistribution of funds as provided in Section III (D)(3).
E. Except as provided for Herein, the distribution of funds as set forth in
s Section III
(A) shall be met over the duration of the tax. A majority
vote of the electors of the County of San Diego shall be required to
amend the ordinance to change the distribution formula set forth in
' Section III (A).
r
IV. Expenditure Plan. The Commission shall approve an expenditure plan which
k
shall include the specific major projects and services to be funded under each
category as set forth in Section III herein.
A. Content. The Expenditure Plan shall include the allocation of tax
revenues to specific projects and services based on the distribution of
revenues among major project categories as set forth in Section III. { Major transit and highway projects to be implemented with tax revenues
shall be identified on maps attached to the Expenditure plan (Exhibits A
! and B). Tax revenues for local street and road purposes shall be allo-
cated based on the formula established in Section III (C)(1) and (2) and in
# accordance with the priorities established in Section III (C)(3)
i
6
B• Consistency with Regional Transportation PIAll proj�.,z.
to be
funded with revenues provided from this tax must be consistent twith the
Regional Transportation Plan. The Expenditure Plan shall be reviewed
on a biennial basis to coincide with the biennial update of the Regional
Transportation Plan required by State law. The Expenditure Plan shall
be amended as necessary to maintain consistency with the Regional
Transportation Plan. Any amendments to the Expenditure Plan shall be
made in accordance with the procedures for amending this ordinance as
provided for in Section X.
V. Fund Transfers. Funds may be transferred under �r the following circumstances:
� A. Between fund recipients
-
Agencies j ng funds maby
exchange 'Wids solong as the percentage iOf funds alloy
cat agreement,
d for each
Purpose over the duration of the measure is maintained. Agreements to
exchange funds must be approved by the Commission and shall be con-
sistent with any and all rules approved by the Commission relating
n g
B. The Commission may exchange tax revenues for State or Federal funds
allocated or granted to any public agency within or outside the area of
Jurisdiction of the Commission in order to maximize effectiveness in
the use of revenues. Such federal or state funds shall be distributed in
the same manner as the tax revenues.
VL Maintenance of Effort. It is the intent of the
Commission that anlo
street and road revenues provided from this tax be used to supp ementyexist 1
ing local revenues being used for street and road purposes.
e Coission
shall develop rules requiring each agency to maintain a specified base level of
local discretionary funding (including General Funds) expended for street and
road purposes. If the Commission determines that an agency has reduced its
local discretionary funding below the specified base level, its allocation of
local street and road revenues received pursuant to this Ordinance shall be
reduced during the next fiscal year by the amount of such local discretionary
fund reduction. Any unspent street and road tax revenues shall be redistri-
buted to the remaining eligible agencies according to the formula described in
Section III (C)(2).
VU. Administrative Costs.UP to IVo of the revenues may be the
Commission for salaries w ges, benefits, overhead, d tingkpended and those ser-
vice including contractual service ' s necessary to administer the Act. Costs
of performing or contracting for project related work shall be paid from the
revenues allocated to that general category as set forth in Section III herein.
VM Implementing Ordinances. Upon approval of this measure by the voters the
Commission shall, in addition to the local rules required to be provided pur-
suant to this ordinance, adopt implementing ordinances and rules and take
such other actions as may be necessary and appropriate to carry out its
ti
responsibilities and establish requirements for;
A. Collection of the one-half of one percent (1/2%) transactions and use
tax authorized by this ordinance
B. Annual and special audits
N
2
C. Annual reporting
D. Other
IX. Effective and Operative Dates. This ordinance shall become effective on
November 4, 1986 only if a majority of the electors voting on the measure at
the election held on November 4, 1986 vote to approve the ordinance. If so
approved, the provisions of this ordinance shall become operative on the first
day of the first calendar quarter commencing more than 120 days after
November 4, 1986.
X. Amendments. Exr,!pt where set forth herein that a vote of the electors is
required to amend a provision of this ordinance, this ordinance may be
amended to further its purposes by ordinance, passed by roll call vote entered
in the minutes, with,a majority of the Commission concurring.
XI, Severability. If any section, part, clause or phrase of this ordinance is for any
reason held invalid or unconstitutional, the remaining portions shall not be
affected but shall remain in full force and effect.
5
FIGURE 38
Orange County
Del k%
MAJOR STATE Mar
HIGHWAY
PROJECTS
1/6% Sales Tax
Expenditure Plan La Jolla
Funding Sources
- State & Interstate San
■..r. Sales Tax (Full Funding) Diego
■••Sales Tlx (Partial Funding)
go Amount of Sales Tax
Revenues (in Millions of Dollars)
This nap WAS produceo by the
Sul Diego
GON,I;R\INII.IN,ri
Ia_
Orange County
4
Camp
Pendleton R
V
P
FIGURE 33
Fallbrook
Riverside County
1 O Valley Center
Vista
Oceanside San fit°
Marcos eo
_ Escondido
Carlsbad
1
Ramona
Encinitas O Rancho
Bernardo
MAJOR Rancho
Santa Fe Q
TRANSIT
FACILITIES
Del Mar Poway
1 /6% Sales Tax
Expenditure Plan Mira Mesa �r
Rail Facilitles ao
�.■• Existing
Light Rail System ` s ( Santee 61
—so Light Rail Built with Local, a
State and Federal Funds Alpine
1..•� Light Rail Built with
Local Sales Tax Revenues 15 El Cajon*
•�•■ Light Rail/Interim La Mesa
Commuter Rail Built with
Local Sales Tax Revenues
Bus Facillties San Lemo
soot Busway Built with
Diego Gr ve
State/Federal Funds �.
Coronado Na n City
e ' ' Chula Vista
.Its
This map was produced by the Imperial Beach
'Slut Diego � - it_%
'kSs(x:Urlo\ ol. y otayMeaa
I YN' Mexico
GOWRN\I
'Tijuana
L'
13
RECOMMENDED LOCAL STREET AND ROAD ALLOCATION FORMULA
LOCAL SALES TAX FOR TRANSPORTATION
1 /6%
VIM
1/1185
FY1984-85
Sales Tax
Total
Maintained
Gas Tax
$50,000 Base
Jurisdiction
Population
Mileage
Revenues
2/3 Pop.-1/3 Miles
Carlsbad
441550
144.4
$ 538,350
$ 6139309
Chula vista
113,310
247.5
1,170,827
11320,763-
Coronado
19,750
40.6
268,973
268,061
Del Mar
5,125
21.9
73,519
121,954
El Cajon
80,100
203.7
1,046,139
997,182
Escondido
75,800
225.2
977,370
980,736
Imperial Beach
24,550
42.6
3190193
310,418
La Mesa,
Sz1200
129.1
689,713
65%814
Lemon Grove
21,650
64.8
291,617
316,484
National City
51,200
90.2
718,885
594,946
Oceanptide
91,800
265.0
11149,755
1,166,736
Poway
35,950
122.7
674,539
512,918
San Diego
971,600
2,365.2
12,3972262
11,274,991
San Marcos
19,800
90.4
266,525
335,822
Santee
49,500
114.9
785,049
614,306
Vista
43,450
141.9
554,499
6001841
County
383,090
2,053.2
20,82'i,956
5,991,387
Regional Total:
2,0839425
6,363.3
$42,744,171
$261666,667
Distribution Formula:
1. Each jurisdiction receives a $50,000 annual base funding.
2. Remaining revenues are distributed on a formula based 2/3 on total popu-
lation and 1/3 on maintained miles of local streets and roads.
Iq