Redwood City voters might see new tax measures on the November ballot.
Public outreach is set to be conducted by the city on proposals for a quarter-cent sales tax increase and a transit occupancy tax increase. The revenue proposals are aimed at stemming projected future budget deficits, according to City Manager Melissa Diaz.
A five-year budget forecast shows the city headed to a nearly $1 million deficit in fiscal year 2019-20 that could grow to nearly $3.7 million in 2021-22 and to $5.7 million in 2022-23. The projected shortfalls are due to rising expenses and declining revenue sources including the statewide problem of growing public pension costs, as well as decreasing sales tax revenue, city officials said.
The city must also prepare for the possibility that the local economy might contract in the coming years, the city said.
In response, the city has identified $6 million in annual cost reductions that will be phased in over the next two fiscal years. The city also aims to identify $6 million in annual revenue increases. Last year, City Council approved $2 million in annual development fee increases. Currently, the city is looking to voters to address the remaining $4 million.
“If we do not have new revenues…we will very quickly have operating deficits,” Diaz told council.
A poll conducted by EMC Research from March 5 through March 13 surveyed 434 likely voters and found sufficient support for a sales tax measure.
Businesses and residents will soon hear more about the proposed tax measures with a public outreach campaign moving forward. City Council is expected to vote on whether to place the measures on the ballot at its July 23 meeting.