Oxnard council to consider placing sales tax increase on November ballot

Oxnard voters in November could face the decision of whether to increase sales tax by 1.5 cents for public safety, homeless services and other city needs. On Tuesday, the City Council will discuss the tax hike proposal.

If green-lighted by elected officials, the sales tax measure will appear on the Nov. 3 ballot. If the majority of local voters support it, the current 7.75% sales tax will increase temporarily to 9.25%.

It's a familiar territory for Oxnard voters. In 2008, they voted in Measure O, which increased sales tax by half a cent. Measure O has been a lifeline for the city. Oxnard got through the last recession with help from Measure O and in 2015, the city's general fund was forced to borrow from the sales tax just to remain solvent.

City Manager Alex Nguyen, who has been hinting at a possible sales tax measure for the past year, will make his case on why new revenue is needed to get the city through this latest recession.

"The current pandemic and economic crisis further emphasize that the city needs to make changes to address its long-term financial issues," according to a staff report from Nguyen. "The city must raise revenues now that repeated cuts, reductions, and layoffs have been implemented — or the city will be required to further decrease the levels of service to the community, ultimately eliminating entire programs and services to the community."

More:Oxnard city manager poised to recommend sales tax increase measure

This council meeting will be the first since the city adopted its budget, which was balanced with significant help from its rainy day funds. City leaders believe that if the current recession continues or worsens, large-scale cuts to programs and services could be proposed in January.

Last year, the city balanced its budget by closing the Carnegie Art Museum, laying off about 30 employees and significantly reducing public works and community services budgets. There were no layoffs this year, but some vacant positions were eliminated and others reshuffled.

The performing arts center and a south Oxnard fire engine — once on the chopping block — got a reprieve thanks to Measure O. But that city-dependent tax hike will sunset in 2029. According to Nguyen, deficit spending projected for the next two years is expected to deplete all of Measure O reserves, requiring the general fund to absorb about $500,000.

Without another voter-approved increase, the local sales tax will drop from 7.75% to 7.25%, back to pre-2008 levels. Should the current proposal get voter backing, the sales tax will be 9.25% until Measure O sunsets, when it will drop to 8.75% in 2029.

Unlike Measure O, the latest sales tax increase proposal does not have a sunset date. If the council decides to place it on the ballot and voters approve it, the extra 1.5 cents will be permanent.

Nguyen said while tax increases with a sunset date are generally more palatable to voters, it would present another fiscal crisis in the future. He said it's important to protect and keep local taxes in Oxnard rather than have them go to Sacramento.

Sales tax amounts vary across California from 7.25% to 10.25%; the bulk of it goes to the state.

For Oxnard, of the 7.75 cents in sales tax, only 1.5 cents stay locally. Of that 1.5 cents, the half-cent is thanks to Measure O. Should voters approve another 1.5-cent hike, all of the increase would stay locally.

The council meeting begins at 5 p.m. Tuesday. To speak during public comment, you must notify the city clerk by 3 p.m. on the day of the meeting. Call 805-385-7803 for more information.

Wendy Leung is a staff writer for the Ventura County Star. Reach her at wendy.leung@vcstar.com or 805-437-0339. You can also find her on Twitter @Leung__Wendy.