Benicia Could Raise Taxes to Close $1 Million Budget Gap

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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