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Posted on: December 20, 2019

City of Scotts Valley Fiscal Emergency and Measure Z

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In early December, the City Council declared a Fiscal Emergency in the City of Scotts Valley and placed a ballot measure, Measure Z, on the March 2020 ballot to increase the local sales tax.

The City is asking Scotts Valley voters to raise revenues to avoid deep cuts and maintain core city services, such as our local police force and dispatch, street, storm drain and park maintenance, emergency preparedness, and other general services.

The City is in an unstable financial condition due to growing projected deficits that range from $1 million to $3 million annually. To meet the gap, the City projects drawing down its safety-net reserves. Within three years, if the deficit is not corrected, the City’s reserves are forecasted to be completely depleted. After that, the City is projected to operate with growing, unsustainable debt reaching nearly $6 million by Fiscal Year 2023/2024, which is nearly half of the total General Fund budget of $12.9 million. The City cannot operate with structural debt and would have to make deep service level reductions to balance the budget.

Measure Z is being placed before voters to prevent deep cuts and establish a sustainable City budget to support current service levels. Measure Z, if approved, would repeal the existing ½-cent local sales tax and replace it with a 1¼-cent local sales tax, raising the sales tax from 9% to 9.75%. The tax measure would generate $3.3 million in total, with $2 million of that in new revenues to the City. All funds would remain in the community to support local services.

An overview of the City’s financial position can be found here. 

For Fiscal Emergency Frequently Asked Questions (FAQs) please click on the categories below: 

To read the official Measure Z ballot measure language, please click here.

The City decided on the sales tax measure as the cost would be shared among all those who use City services. Many people who live outside City limits, including those living in San Lorenzo Valley and other areas, travel on City streets, frequent our parks, and use police services. A sales tax measure allows all those using City services to share in the cost of those services.

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