Sales Tax Increase Proposed as Key Solution for Jail Expansion: Voters to Decide Once Again

During the May 21, 2024, Board of Supervisors meeting, the Board voted 3-2 to propose a 1%, jail expansion specific, sales tax increase for vote on the November 2024 ballot. This came following a presentation by Deputy CEO Erin Bertain, giving a detailed overview of Shasta County’s financial outlook for the proposed jail expansion, citing that without increased revenue from a sales tax, the County lacks the funds to proceed with the project.

Despite having accumulated a savings balance of $34.2 million since the 2021-2022 fiscal year, the estimated total cost for the jail expansion was $125 million as of July 2023, leaving a substantial funding gap of $90.1 million. Costs have likely increased since then and will continue to rise. 

Financial Implications

Bertain highlighted the ongoing annual costs associated with the jail, which include bond payments ranging from $5.1 million to $8.5 million and operating expenses estimated at $10 million. This brings the total annual operating costs to between $15.1 million and $18.5 million. These costs are expected to increase due to inflation and other economic factors, further complicating the county's financial planning.

Funding Challenges

Several adverse factors were noted in the presentation:

• Limited grant opportunities.
• High federal interest rates.
• Unstable state and federal financial environments.
• A down-trending economy.

These challenges hinder the county’s ability to secure necessary funding through traditional means.

Potential Funding Solutions

The presentation identified a sales tax increase as the only viable option to cover the annual operating costs, currently ranging from $15 million to $18.5 million. A 0.5% sales tax increase could generate $17.7 million annually, while a 1% increase could raise $35.4 million. A specific sales tax dedicated to jail expansion requires a two-thirds majority vote, whereas a general tax increase would need a simple majority but lacks earmarking for the jail expansion.

Board of Supervisors' Stance

The Board of Supervisors expressed reluctance to propose a tax increase, citing doubts about public support. This skepticism is grounded in the failure of Measure A in March 2020, where a proposed 1% public safety sales tax increase for jail expansion was rejected by 51.5% of voters. 

Despite this reluctance, in an effort to give the public a voice in the matter, the Board voted 3-2 to direct staff to propose a 1% specific sales tax increase item to be on the November 2024 ballot. The proposed item would require Board approval by July 15th to appear on the November Ballot, and then a two-thirds majority vote from residents to pass (66.67%).

Without increased revenue from a sales tax increase, the county lacks the funds to proceed with the project, highlighting a critical juncture for the community and its leaders in addressing public safety and fiscal responsibility.

Fore more details and to view the presentation, please refer to the Shasta County Board of Supervisors Meeting Video, Item R7.