Officials are weighing new taxes and fees as a way to help the city overcome its projected $2.3 million deficit.
Among the possibilities are a local sales tax, which could boost revenues by $3 million annually; a utility tax, which could bring in $1.9 million; and an increase in the hotel tax, which could raise $90,000, according to a report from Finance Director Richard Averett.
Other options presented to the City Council on Monday were introducing or raising fees related to development, construction traffic, 911 or street parking.
Some of the options — including the sales tax and utility tax — would require voter approval, while fee increases are up to the City Council. Most of those decisions are likely to be made in June as San Carlos gets closer to adopting a budget for 2006-07, according to Assistant City Manager Brian Moura.
Council members did not overwhelmingly support increasing taxes, but it may be too soon to tell.
“Philosophically, I'm not a proponent of taxing people more than they're already being taxed,” Mayor Matt Grocott said. “I would like to look at ways to become more efficient.”
Instead, Grocott urged higher fees — such as one on heavy construction vehicles whose wheels cause significant road wear — and the pursuit of grants for city projects.
Others said their support would depend on how residents want totackle the city's finances. “If the public thinks we can get more of what we need that way, it should certainly be evaluated,” City Councilmember Brad Lewis said.
Whether residents support higher taxes may depend on where the money goes.
“If the city's funding things that are mission-critical, like fire, police and safety … we should figure out the most equitable way to raise taxes,” resident Stephen Shray said.