Carpinteria officials are considering a sales tax increase that city staff say could provide a boost to strained local finances.
The city’s sales tax rate is currently 9%, just below the statutory cap of 9.25%. Adding a 0.25% transactions and use tax, commonly known as a TUT, could generate an estimated $694,500 annually in discretionary funds, according to city staff.
Officials say the city’s revenues are not keeping pace with rising expenditures, as increasing day-to-day costs continue to pressure the discretionary budget. Those funds help support essential services such as police and library operations.
Some residents say the additional revenue is necessary to maintain city services.
“I think the sales tax is much needed and something that tourists and visitors pay, so it’s not 100% a burden on Carpinteria residents,” said resident Lorraine McIntire.
.Others, particularly small business owners, have raised concerns about the potential impact on sales.
“I’m not in favor. Our sales tax is already high,” said Denise Barber, owner of PacWest Blooms.
Barber says even a small increase could influence customer decisions, especially on higher-priced transactions. On a $30,000 purchase, the proposed tax would add an additional $75.
“I think people are always looking for value, and when you add another cost, especially on a large purchase, they have to factor even more into their budget,” she said.
The city last asked voters to approve a sales tax increase in 2018, when a proposed 1.25% hike appeared on the ballot.
