The Senate Local Government Committee approved legislation March 19 that would pave the way for higher taxes in areas along the Central Coast.
SB 333, by Senator John Laird, would authorize the San Luis Obispo Council of Governments to adopt, with voter approval, a 1 percent transactions and use tax that would, in combination with other taxes, exceed the state’s 2 percent transactions and use tax cap.
The bill was approved with a party-line vote of 5-2, with Democrats in support, and now moves to the Assembly Revenue and Taxation Committee.
“I should emphasize, this is not a tax increase,” Laird testified. “This just allows the voters to decide if they want a tax increase.”
Laird, a supporter of a wide variety of tax increases during his 11 years in the Legislature and additional time in local positions and as Governor Jerry Brown’s resources secretary, said the county needs more revenue to spend on regional infrastructure projects.
CalTax opposes the bill, noting that it would make the San Luis Obispo area less affordable.
“If SB 333 is enacted, the sales tax rate in San Luis Obispo County could reach 10.25 percent – impacting the region’s thriving agricultural, manufacturing, and research-and-development industries,” CalTax Policy Advocate Tobias Wolken testified. “CalTax believes the existing 2 percent cap on transactions and use taxes plays an important role in keeping the state affordable, especially for low-income Californians, and efforts to circumvent the cap should be rejected.”
In letters to the committee, CalTax noted that within the past four years, the Legislature has authorized 12 local governments to exceed the 2 percent transactions and use tax cap. These exemptions impact more than 15 million Californians, reducing the affordability of the state.
Responding to Wolken’s testimony, Laird stated that “the witness opposed has never been on the Jack O’Connell Highway at rush hour,” referring to one of the transit projects that the proposed sales tax would fund, named after a former Democratic state lawmaker and state superintendent of public instruction. (CalTax: Wolken is a former Central Coast resident and frequently drove on the Jack O’Connell Highway during rush hour.)
The committee also approved SB 346, by Senator Maria Elena Durazo, which would authorize local governments to enact ordinances to require the owners of property used for short-term rentals to report the assessor’s parcel number of each such property, and to require that listings for short-term rentals include any applicable local license number and any transient occupancy tax certification issued by a local agency. SB 346 was approved with a unanimous 7-0 vote and now goes to the Senate Judiciary Committee.
The action came during the Local Government Committee’s first hearing of the year. The meeting kicked off with a no-vote informational hearing on challenges facing local governments, including the problem of residents “Zoom bombing” public hearings and making obscene or otherwise inappropriate comments that disrupt local governments’ ability to conduct business.