At a special meeting Tuesday, the Vernon City Council voted to place three tax measures on the city’s general municipal election ballot in April.
The three taxing measures include a business tax, parcel tax and a utility user’s tax.
City Administrator Mark Whitworth said at the meeting that the city is proposing the new taxes as a way to address Vernon’s budget deficit.
“The city of Vernon has been working on good governance reforms, respecting city budget policies and practices, and we’ve been working diligently in recent years to develop a long term solution for the general fund structural deficit,” Whitworth said.
The mostly industrial city, with just 100 or so registered voters, has for years touted its ability to keep costs to businesses operating in the city low. Measure K, a business license tax measure, would make the current tax to business owners five times higher. If passed, estimates are that it will provide the city with an additional $4.5 million in revenue.
The new measure would also clarify some of the city’s tax language, and would allow some business licenses to be combined. Businesses that are owned by the same person and are not separated by a public street, for example, would not be subject to a double tax.
The city also hopes Measure K makes it more efficient for outside contractors to do business, by changing from annual to quarterly contracts to match how long it usually takes to complete a project in the city.
Several business owners at the meeting told council members they oppose the tax, which they claim will make it harder to do business in Vernon. One owner expressed his concern over the wording of the measures, which he said would not accurately represent the impact the tax will have on businesses in the city.
The council also voted to ask voters to approve a business parcel tax—Special Tax Measure L—that would levy a 3 cent tax on every square foot of non-residential lots to fund public safety services. The 10-year tax would help fund fire, health and police services through 2023 and is expected to generate $1.9 million, according to city officials. The square footage that businesses are already being taxed through the Warehouse Parcel Tax would be excluded from this new tax.
Councilman Michael Ybarra, who is both a business owner and resident, recused himself from the discussion and voting on the measure to “not affect or create any appearance of a conflict of interest.”
Some members of the audience asked the city council to look into the possibility of outsourcing the city’s public safety services in order to bring down their cost.
As for Measures M, the Utility Users Tax, voters will decide if they want to approve a 10-year, 1% tax increase, which could generate $1.6 million for the city. The tax would be applied to water, gas, electricity and telecommunications usage.
Originally, the proposed measure excluded residents, but Councilman Ybarra asked the council to amend it to include both residents and businesses in order for them to “share the cost.” The council also added a $250,000 annual cap for taxpayers and excluded low-income households and the disabled from the tax increase, if approved.
The city council needed to adopt the resolutions by Jan.11 in order to ensure the measures got on the April 9th ballot.
Whitworth told the audience the measures are needed to deal with Vernon’s ongoing budget deficit, which had exceeded $20 million a year going back to the 1970s.
“We needed to address this deficit,” Whitworth told the council. “We need to put the proper revenue streams to match up to your expenditure revenues.”