The City Council has placed before the voters the question whether to
approve an ordinance enacting a temporary transactions and use tax
within the City of Modesto. The tax rate would be one percent (1.0%) of
the retail sales price, or one cent for an item that costs one dollar. The
tax would remain in effect for six years. A full copy of the ordinance text
is printed in these ballot materials.
Currently, the tax on retail sales in Modesto is 7.625% of the purchase
price. The City receives 0.75% of that total amount. The remainder
goes to the State (6.5%), Stanislaus County Local Transportation Fund
(0.25%), and Stanislaus County Libraries (0.125%). Retailers collect
the tax at the time of sale and remit the funds to the State Board of
Equalization, which administers the tax and sends the City its share.
This measure would authorize a 1.0% transactions and use tax, which
would increase the total sales tax rate to 8.625%. Of that total amount,
1.75% would be deposited in the City’s general fund and be available
to support the full range of municipal services. Because this measure
does not legally restrict the use of tax revenue to any speciﬁ c purposes,
it is classiﬁ ed as a “general tax,” not a “special tax.”
The tax would automatically terminate six years after it becomes
operative, unless extended by the voters. In addition, the tax would
be reduced to one-half percent (0.50%) in the event that a countywide
transactions and use tax to fund roads were enacted.
This measure requires the City Council to appoint an eleven-person
citizen oversight committee to review and oversee expenditures of
the revenue, to review the portion of the audit prepared by the City’s
independent auditor that relates to the tax, and to prepare a public
report on the expenditure of funds from the tax.
A “Yes” vote is a vote in favor of the tax. A “No” vote is a vote against
the tax. This measure would be approved if it receives a simple majority
of “Yes” votes.