Local officials, as they've explained the economic struggles of the cities and the county, have pointed to decreased revenues – among those, sales tax.
County Administrative Officer Kelly Cox told the Board of Supervisors Tuesday during his presentation of the preliminary 2010-11 budget, “Discretionary revenues such as property tax, sales tax, transient occupancy tax and property transfer taxes have been declining while the demand for public services is on an increase.”
Lakeport City Manager Margaret Silveira told Lake County News this week that revenues for the city continue to decline, a situation also faced by Clearlake, where City Administrator Dale Neiman has reported to the Clearlake City Council about dwindling revenue streams for the city.
This week, the state Board of Equalization reported that taxable sales statewide declined by 19 percent in the second quarter of 2009 as compared to the previous year.
Statewide, sales tax is 8.25 percent, but in the cities of Lakeport and Clearlake it is 8.75 percent, according to the state.
The rates in the county's two municipalities are higher because of the half-cent Measure I sales in Lakeport, passed in 2005 to support special projects, and half-cent Proposition P in Clearlake, which supports the city's police department and was passed by voters in 1995, state records show.
In constant dollar terms, taxable sales decreased by 15.5 percent over the same quarter a year ago, the Board of Equalization report explained.
In addition, the California Taxable Sales Deflator measured an inflation rate of -4.1 percent for the second quarter of 2009, while the California Consumer Price Index declined 1.1 percent.
The Board of Equalization reported that taxable sales in California continued their “unprecedented decline” in 2009's second quarter, totaling only $113.4 billion, down $26.6 billion from the second quarter of 2008.
The year-over-year decline in quarterly taxable sales continued for the eighth consecutive quarter, the Board of Equalization reported.
“The decline in taxable sales last year in California mirrored the national recession with weak retail sales,” said Chairwoman Betty T. Yee. “Californians continued to be concerned about jobs and housing costs while tightening their consumer spending.”
The Bay Area's major cities saw large declines – San Jose had a decline of 22.4 percent, Oakland declined 20.6 percent, and San Francisco was down 18.8 percent, according to the report.
At the same time, the Board of Equalization reported that some smaller municipalities and rural areas fared better in the second quarter of 2009. One example – Colusa County's taxable sales increased 53.6 percent.
In Lake County, the picture was more negative.
The report showed that taxable sales for Lake County in the second quarter of 2009 were down by 25.3 percent. Information for the third and fourth quarters of 2009 are not yet available.
In the first quarter of 2009, the cities had $54,087,000 in taxable sales, with the county reporting $50,175,000. There also were $15,792,000 in unallocated taxable sales, for a total of $120,054,000.
Data for the last several years showed that the county's taxable sales have grown steadily, but that the cities started seeing declines in 2007.
Taxable sales for 2005 through 2008 are as follows.
2005
Clearlake, $110,625,000
Lakeport, $122,456,000
Unallocated, $66,597,000
Unincorporated county, $239,464,000
Total – $539,142,000, up 6.2 percent over 2004.
2006
Clearlake, $113,426,000
Lakeport, $127,352,000
Unallocated, $76,538,000
Unincorporated county, $249,035,000
Total – $566,351,000, up 5 percent over 2005.
2007
Clearlake, $115,209,000
Lakeport, $123,459,000
Unallocated, $82,275,000
Unincorporated county, $249,518,000
Total – $570,461,000, up 0.7 percent over 2006.
2008
Clearlake, $114,936,000
Lakeport, $112,248,000
Unallocated, $90,290,000
Unincorporated county, $255,000,000
Total – $572,474,000, up 0.4 percent over 2007
In order to understand the impact of the dropping sales tax rates on state and local government, it helps to look at how the 8.25 percent base sales tax rate is allocated.
The Board of Equalization said that 6 percent goes to the state's general fund; 0.25 percent goes toward the State Fiscal Recovery Fund, which pays off economic recovery bonds; 0.50 percent is used for the Local Public Safety Fund, which supports local criminal justice activities; and another 0.50 percent is allocated to the Local Revenue Fund for local health and social services programs.
The remaining 1 percent goes to counties – 0.25 percent for county transportation funds and 0.75 percent to city and county operations, the agency reported.
E-mail Elizabeth Larson at
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