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Benicia Could Raise Taxes to Close $1 Million Budget Gap

The Benicia City Council will consider long-term plans to increase taxes as a way to stabilize the city's budget.

Benicia residents could be paying more in sales or utility taxes in the future as a way to stabilize the city's budget, according to a city staff report.

Any changes wouldn't be put to a vote for a few years, but the Benicia City Council will meet tonight to discuss a $1 million gap in the city's budget and begin to talk long-term fixes.

"In order to attain a sustainable budget in these uncertain times, staff is recommending utilizing a combination of reserves and expenditure reductions for the current year shortfall, allowing time to develop a long-term work-out plan," the staff report states.

The budget gap, which staff say is mostly caused by a drop in property tax revenue, could be solved in a number of ways, as described in the staff report for Tuesday's meeting:

  • Sales Tax: "a one-cent increase could generate $600,000 annually."
  • Parcel Tax "...however, this does not address diversification of revenues."
  • Utility Users Tax (UUT) Rate Increase: "an increase of the current rate of 3.5% to 5.0% would generate approximately $900,000 and require a simple majority vote when a Council member is standing for election."
  • Utility Users Tax, Broadened Definition: "another option is to broaden the definition of UUT to include water and would generate $287,000. Benicia currently charges 3.5% on telecommunications, gas and electricity." 
  • Increase Permit Fees: "current building and planning fees do not cover the costs of providing these services. An increase in the level of cost recovery could provide an additional $100,000 and be approved by the City Council."
  • Increase User Fees such as Recreation, Facility Rentals, and Encroachment: "these program fees are also not set to fully recover the costs of the program and increases could generate an additional $45,000."

Over the last three years, the city has cut about 25 employees and reduced the pay of city staff by 10 percent. Those cuts have made it harder to keep up with demand and to attract and retain employees, according to the staff report.

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Benicia City Council meeting
6 p.m. Tuesday
City Council Chambers, 250 East L St.

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Gretchen Filer January 24, 2013 at 02:06 AM
And, of course, we were promised that the bridge tolls were "temporary" just until the Bridge was paid for. When I moved here it was 40 cents, 25 cents for commuters. Now the toll keeps increasing with money spent for other things.
Jason January 24, 2013 at 03:49 AM
What regular people? The tens of millions sitting on trillions in student loan debt, credit card debt, and mortgages they never had any hope of repaying all begging Obama to "forgive" their debts and stop banks from collecting? The government is no less irresponsible that the average person.
AL January 24, 2013 at 07:01 AM
Just like they said every resident was notified of their right to protest the water "fees" ( your bills will be 40% higher in 3years)- I asked a few days before the deadline and council meeting for a feature or at least announcement on Patch- but there was nothing so I believe this site now like mainstream news- its all just what they want us to hear
rob pearson January 24, 2013 at 04:05 PM
Has anyone heard the city complaining about losing money on the water system prior to the increase? Now i see an audit being done and suddenly they are losing over 2 million between providing water and treatment. All this popped up with a couple articles about the inefficiency of our system so i ask you, what the heck is going on here? This seems like a major cover up. Perhaps our UN-needed city treasurer could perform an investigation for us so he will have something to do?
Robert Livesay February 01, 2013 at 08:10 PM
Rob the budget will get balanced. There will be no new taxes or fees. If any fee changes it will be minor. They are already doing some things to get this done. It will take about 18 months to get everything in place. It will happen. A balanced budget.

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