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Sales tax increase could be coming to City of Arroyo Grande

Voters could soon decide on raising the sales tax by 1 percent
Posted at 8:12 AM, Jun 11, 2022
and last updated 2022-06-11 11:13:08-04

A sales tax increase could be coming to the City of Arroyo Grande.

From potholes to cracks in the roads, drivers are facing a bumpy ride in parts of the city.

Voters could soon decide on raising the sales tax by 1 percent to help fix streets and sidewalks.

"Every year, the update gets more scary and more dire in terms of the way our streets are looking and the condition," said Arroyo Grande City Manager Whitney McDonald.

Arroyo Grande is facing a budget shortfall as streets, sidewalks and storm drains start to deteriorate.

The City uses a scale of 0 to 100 to rate the condition of its streets. The current score is 56, which is considered fair and accounts for roads in good condition and those in disrepair.

The City now says it needs around $6.25 million each year to maintain the current, overall conditions.

Current revenue generates about $1.25 million a year for street and road repairs.

To fill the gap, the City has submitted a ballot initiative that would raise the sales tax by 1 percent from 7.75 to 8.75 percent.

"It's a really significant gap for us. The sales tax measure was really seen as our best bet to have sufficient funding to invest it in our infrastructure," said McDonald. "It is a lot to ask of the public and visitors, especially given the inflationary index at this point in time. We understand that it is a challenge and a difficulty."

The City says the sales tax hike was the fairest way to generate revenue since visitors would be paying in.

The increase would bring Arroyo Grande's sales tax up to the level of most other cities in the county.

The score used to rate the quality of city streets has decreased by five points since 2016.

The sales tax increase would apply to anyone purchasing goods in Arroyo Grande.