Taxes, cannabis on table for dealing with looming Oroville budget deficit

Friday's Butte County Grand Jury Report for 2017-2018 may provide hope to Oroville city leaders who are pushing for an increase in the sales tax, which currently stands at 7.25 percent.

In its report, the Grand Jury found that the city council "urgently needs to identify and pursue additional sources of revenue" as it should "reconsider how they and the City staff operate."

A looming budget crisis was caused primarily because of approximately $500,000 in payments to the California Public Employee Retirement System (CalPERS) due next fiscal year, according to Bill LaGrone, who is the interim assistant city administrator, human resources manager and public safety director for the city.

"It's the cost of retirement, it's the cost of health insurance, it's the overall cost of doing business," said LaGrone.

The city has been on an austerity program which has seen city staff decline from 143 to 97 employees. Its police force has dropped from 26 to 19 officers.

Starting on May 1, City Hall will be closed on Fridays as another way to cut costs.

"It's either a sales tax or bankruptcy," said Linda Dahlmeier, whose been the mayor of Oroville for eight years.

Dahlmeier believes its citizens should raise the sales tax from 7.25 percent another one percent. Currently Oroville's sales tax is below the state's average.

"If the average is eight percent and we're at 7.25 then we're below average," said Dahlmeier. "We have to get to at least eight percent to just break even."

The city tried to pass a tax increase, but Measure R was rejected by voters during the last election cycle, as many residents here are wary of tax increases.

"Even if they say the taxes are for a specific purpose, I don't trust them that they'll use those taxes just for that purpose," said Bill Sharman, an Oroville business owner.

City leaders say that its skeleton-run operation will keep Oroville in the black for another year, but something is going to give when CalPERS comes due the following year.

The Grand Jury report also noted that city council members have studied the cannabis dispensaries in the City of Shasta Lake as another short-term solution.

Long term, the Grand Jury report said there should be consideration of hiring a full-time city manager, which would take away much of the financial decision-making from the 7-member city council.

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