Coffers filling up with gas-tax revenues

Gas prices may have people fuming, but the steep prices are contributing funds to save jobs at fire departments, fix cracks in the sidewalk and support youth sports programs.

Record gas prices are allowing cities to rake in extra cash from the sales tax paid on those purchases. That money is then lumped into a general budget that is used to pay for many city services, including police, fire, library, and parks and recreation.

Overall, city finance officials across the region said about 1 percent to 2.5 percent of their budget comes directly from gas station sales taxes.

Peninsula city budgets range in the neighborhood of $30 million to $90 million and, depending on population, annual revenue from gas sales can add hundreds of thousands of dollars, according to officials.

Skyrocketing gas prices are significant to city coffers at this point, officials said, because car and home sales are declining.

“We have seen some slowdown in auto sales; as a result, of course, the sales tax would be less,” said Hossein Golestan, finance director for San Mateo. “But the [gas] stations are doing better, so it offsets.”

Overall, however, enlarged oil revenues have not worked miracles, as capital programs will continue to go unfunded and services will stay stagnant in virtually every Peninsula city because of the slumping economy, officials said.

“We’re not expanding any programs, that’s for sure,” said Jesus Nava, finance director for Burlingame. “I don’t think anybody is.”

It also is difficult to budget for any increases in revenue from the gas tax, said Jim O’Leary, head of San Bruno’s Finance Department.

The trend is not making a huge impact on every city.

Municipalities such as Pacifica that do not have many gas stations are seeing an increase in gas tax money, but not the sort of cash flow that would make a significant budget impact, Pacifica administrative services director Ann Ritzma said.

In San Francisco, officials are looking to use the gas tax in a slightly different way.

In Mayor Gavin Newsom’s proposed 2008-09 budget, The City would borrow on its future gas-tax earnings in order to pay for street repairs now.

mrosenberg@sfexaminer.com

By the numbers

How gas prices are helping fill city coffers

36 percent Increase in local gas prices since last year

3 percent Dip in state gas purchases since last year

8.25 percent San Mateo County sales tax

$55.28 Average cost to fill a 12-gallon tank in 2008 in San Francisco and San Mateo counties

$4.56 Average sales tax a city earns from that fill-up

$40.52 Average cost to fill a 12-gallon tank in 2007 in San Francisco and San Mateo County

$3.34 Average sales tax a city earned from that fill-up

Sources: AAA Fuel Gauge Report, State Board of Equalization

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