After weeks of reductions and attempts to close a huge budget shortfall, the city council recently submitted its first budget proposal, which included the continuation of a tax increase scheduled to expire in August 2017.
The Glendale Chamber of Commerce recently sent a letter to city council opposing the continuation of the tax. The chamber originally was opposed to the tax when it was voted for in 2012.
“After careful and thoughtful consideration, the Glendale Chamber of Commerce wishes to express its opposition to the continuation of the sales tax increase set to expire on Aug. 1, 2017,” the chamber wrote in the letter addressed to the council and City Manager Brenda Fischer. “As you know, the Glendale Chamber opposed the sales tax increase in 2012 and continues to oppose the tax increase as an option to help balance the city budget.”
In early budget discussions, council discussed the 0.7 percent sales tax and said that each 0.1 percent generates approximately $3.4 million in tax income. Should the tax expire, it would cut the income to the city by more than $23 million.
“I think we have to get rid of the sunset clause of the tax and not let that tax expire,” said Councilmember Gary Sherwood at a December council meeting. “We may have to raise it more in order to close the gap.”
In fiscal year 2017-18, when the tax is scheduled to expire, the deficit is projected to rise from negative $27 million to negative $58 million.
“Staff would like to highlight the fact that if it is the decision of the council on a long-term basis not to expire the sales tax and there is no other voter initiative that overturns it, we have a problem getting to fiscal year '17-18,” said Fischer in January. “If you look at it, we are $27 million insolvent before we get there.”
Councilmember Norma Alvarez has said she felt any such implementation of keeping the tax should be sent to the voters, but she has been shut down by other councilmembers.
In the chamber letter, the board said it, “realizes that the city is diligently working to close a multi-million dollar gap in the budget, but placing a continued burden and competitive disadvantage on Glendale businesses is not a pro-business agenda.”
When contacted for further comment, Chamber President & CEO Robert Heidt said the chamber was “still working through the issue and are not ready to comment further.”