HomeMy WebLinkAboutCC 2025-01-14_09g SLOCOG Special State Legislation Letter of Support (F PRROYO
NCORPOR
ATED Y�
* JULY 10, 1911
c4EIFOON MEMORANDUM
TO: City Council
FROM: Matthew Downing, City Manager
BY: Aleah Bergam, Management Analyst
SUBJECT: San Luis Obispo Council of Governments (SLOCOG) Special State
Legislation Letter of Support
DATE: January 14, 2025
RECOMMENDATION:
Authorize the Mayor to execute a Letter of Support (Attachment 1) in support of legislation
that would provide an exemption from the current Bradley-Burns two percent local sales
tax cap for the San Luis Obispo Council of Governments (SLOCOG) to pursue a regional
sales tax measure for transportation, subject to voter approval.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
None, though the letter could result in legislation that would allow SLOCOG to ask voters
to approve a regional tax measure to fund transportation projects in San Luis Obispo
County.
BACKGROUND:
As transportation funding from State and Federal sources continues to diminish,
SLOCOG is requesting support from local jurisdictions to seek special State legislation.
If proposed and approved, this legislation would provide an exemption to the 2% Bradley-
Burns sales tax cap rate for a future transportation measure that may be proposed to the
voters.
Sales tax levels in California vary from 7.25% to 10.75%. With 7.25% as the base, local
agencies are allowed to increase this base level by up to 2%, with voter approval. Special
legislation is necessary to exceed the 2% cap. The 2% cap was implemented in 2003,
over two decades ago. Since then, several bills have passed the Legislature to create
exceptions to the cap. This cap is quickly reached since cities and counties each enact
local taxes. It is particularly problematic for counties because if one city within a county
has reached the cap, then the county is precluded from seeking voter approval to self-
impose additional district taxes. Similarly, cities that have already reached the cap are
constrained when seeking additional funding for programs and services above the cap.
Item 9.g.
Page 107 of 190
City Council
San Luis Obispo Council of Governments (SLOCOG) Special State Legislation
Letter of Support
January 14, 2025
Page 2
Currently, six jurisdictions in the San Luis Obispo region have a sales tax (approved by
voters) of 8.75%. With only 0.5% remaining, a proposed SLOCOG measure could be
impeded due to competing measures from a city, the county, another regional measure,
or a citizens' initiative. Each is allowable under current law. However, if one jurisdiction
reaches 9.25%, no other regionwide sales tax can be pursued unless special legislation
is sought and approved.
Over the last decade, multiple counties have pursued and had approved legislation to
waive the 2% including: Alameda, Contra Costa, Humboldt, Los Angeles, Monterey,
Riverside, San Mateo, Santa Cruz, and Ventura. Many cities have pursued and had
approved legislation as well. Of the 500+jurisdictions in the state, nearly 100 jurisdictions
have a sales tax (as of 2024) over the 9.25% level.
ANALYSIS OF ISSUES:
If legislation is passed, it will not approve or institute a tax or change how a tax may be
approved. Instead, the legislation would authorize SLOCOG to develop a tax measure
that would exceed the current sales tax cap imposed by Bradley-Burns, if approved by
voters. Under present law, there may not be sufficient capacity for SLOCOG to propose
a sales tax for voter approval within the existing 2% cap for transportation (maintenance,
projects, improvements, multimodal, etc.). Additionally, a measure (or initiative) can be
proposed for voter approval for the same remaining 0.5%. The proposed legislation would
exempt SLOCOG from the 2% cap to allow a transportation measure (proposed by
SLOCOG or a citizens' initiative) to be placed on the ballot for voter consideration. Such
a measure would allow future San Luis Obispo County voters to consider whether they
would like to raise revenues to address the severe traffic in our county, including along
the U.S. 101, goods movement and safety along SR 46, auxiliary routes such as SR 227,
and fund several multimodal projects countywide.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
1. Authorize the Mayor to execute a Letter of Support (Attachment 1) in support of
legislation that would provide an exemption from the current Bradley-Burns 2%
local sales tax cap; or
2. Provide direction to staff to not execute the attached letter of support.
ADVANTAGES:
If legislation passes that exempts SLOCOG from the current Bradley-Burns two percent
local sales tax cap, SLOCOG or a citizens' initiative may be placed on the ballot for voter
consideration at more than the remaining 0.5%, allowing San Luis Obispo County voters
the opportunity to consider raising the sales tax at more than 0.5% to address
transportation needs.
Item 9.g.
Page 108 of 190
City Council
San Luis Obispo Council of Governments (SLOCOG) Special State Legislation
Letter of Support
January 14, 2025
Page 3
DISADVANTAGES:
There have been no disadvantages identified.
ENVIRONMENTAL REVIEW:
Issuing a letter of support is not a project subject to the California Environmental Quality
Act ("CEQA") because it has no potential to result in either a direct, or reasonably
foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§
15060 (c)(2) and (3), 15378.) Alternatively, issuing a letter of support is exempt from
CEQA on the basis that it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment. (State CEQA
Guidelines, § 15061, subd. (b)(3).)
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City's website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Draft Letter of Support
Item 9.g.
Page 109 of 190
CITY OF
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filCAL-IFORNIA
January 15, 2025
The Honorable John Laird
Senator, 17th District D RA
1021 0 Street, Suite 8720
Sacramento, California 95814
Re: Bradley-Burns Local Sales Tax Exemption - San Luis Obispo Countywide Local Transportation Sales Tax
Dear Senator Laird:
On behalf of the City Council of the City of Arroyo Grande, I write in support of legislation that would provide an
exemption from the current Bradley-Burns two percent local sales tax cap for the San Luis Obispo Council of
Governments (SLOCOG) to pursue a regional sales tax measure for transportation, subject to voter approval.
SLOCOG is considering a 0.5% countywide transportation investment measure for the November 2026 ballot.
However, with other non-transportation tax measures proposed by San Luis Obispo County jurisdictions, there
may not be sufficient capacity under the countywide 2% local option sales tax cap. The enactment of this
legislation would ensure that SLOCOG, the County of San Luis Obispo, and all seven cities would be able to
engage in a public process to develop an expenditure plan for voters' consideration. This is an opportunity for
San Luis Obispo residents to consider resources to improve its transportation infrastructure, including safety and
mobility needs.
Additionally, we support language to ensure greater public participation by allowing the county to place a qualified
voter initiative on the ballot, with the condition that the measure generates at least a 0.5% sales tax and is used
for countywide transportation purposes. This would maximize public participation in constructing an expenditure
plan and make the electorate more well-informed on a ballot measure before its placement. The qualification of
an initiative would occur under an independent process currently provided by the Constitution. Neither SLOCOG
nor any public entity would be involved in signature-gathering efforts nor messaging for such a campaign. The
county would serve as the custodian of placing the measure on the ballot.
For these reasons, we support a local sales tax exemption to pursue a countywide transportation measure and
process that would foster greater public input. Please do not hesitate to contact me. I appreciate your
consideration.
Sincerely,
Caren Ray Russom
Mayor
Cliy OF ARROYO GRANDE • 300 E. Branch Street • Arroyo Grande, California 93420
Phone: (805) 473-5400 • Fax: (805) 473-0386 • E-mail: agcity@arroyogrande•org • Website: www•arroyogrande•org
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