Sales tax revenue is at a historic high in Solvang, and could potentially double if a proposed measure on the city’s upcoming election ballot passes.
In November, Solvang residents will have the chance to vote for or against Measure U, which would initiate a 1-cent increase (1 cent for every dollar spent) on local sales tax. City Manager Xenia Bradford addressed the proposal and the current state of local sales tax revenue during Solvang’s State of the City event on Aug. 24.
“We as a city collected record high sales tax,” Bradford said, referring to Solvang’s 2021-22 fiscal year. “We celebrated almost $2 million in collections, which is the highest that we have ever had since the city incorporated.”
Bradford described Measure U as a tool for Solvang to maintain “local control over local funds for local needs.”
City staff estimates the measure will generate an extra $1.6 million in revenue per year to support and improve essential services—including road and sidewalk maintenance and repairs, flammable brush removal, and other services—and help fund recreation programs for youth, adults, and seniors.
If Measure U is passed, the city of Solvang will designate an independent citizens’ oversight committee to oversee the progress of the measure, through financial audits and yearly reports, “to ensure that all funds are spent as promised,” Bradford said.
Bradford added that the 1-cent measure would not apply to local sales of groceries or prescription medications, “so it’s not a burden on seniors or low-income residents.” She also explained how the proposed tax increase will collect more funds from Solvang visitors than residents.
“As two-thirds of Solvang’s sales tax is paid by out-of-town visitors and tourists, if enacted, Measure U ensures they pay their share for utilizing our city services,” Bradford said.
Tracy Beard, executive director of the Solvang Chamber of Commerce, also commented on the city’s dependence on tourism dollars during the State of the City event.
“We don’t live without tourism. We depend on tourism at every level,” Beard said. “We need those hotels full. We crab a little about traffic, but they make the tax dollars easier for the community.”
Mayor Charlie Uhrig highlighted Measure U in his State of the City speech, and urged residents to vote yes. The measure won unanimous approval from the City Council in June and was added to the upcoming ballot after a 5-0 vote.
“The council is asking for the voters’ support,” Uhrig said. “This will be a benefit to all of our residents and businesses as the city looks to increase our overall revenue tax base to continue paying for the services that help to protect and serve each one of us here in Solvang.”
This article appears in Sep 1-8, 2022.