Sacramento looks at half-cent sales tax to solve transit, housing, climate issues

Alan Riqualmy

SACRAMENTO, Calif. (CN) — Sacramento Mayor Darrell Steinberg on Friday unveiled a proposal for a countywide ballot initiative that, if passed, would raise almost $10 billion over 40 years to tackle transportation, housing and climate change.

The measure — dubbed the “Climate, Clean Transportation, and Affordable Housing Act of 2024” — would impose a half-cent sales tax in Sacramento County, which has almost 1.6 million people. He suggested it go to the ballot in November 2024.

“We are never afraid to innovate, and we are never afraid to lead,” Steinberg said at the third of three discussions he held this week in lieu of a traditional state of the city address.

Sacramento city’s sales tax is currently 8.75%. The county has seven cities, including Sacramento.

Calling Sacramento the capital of the nation’s most dynamic and important state, Steinberg said similar measures have failed in the past, most recently in 2022. Those focused on new roads, with under half of the proposed funds slated for transit and safer streets. They also had no focus on climate.

That led to Friday’s proposal which links transportation to housing and the climate.

Steinberg said the Sacramento Transportation Authority, a countywide body with representatives from all county cities, could place the measure on the ballot. If any question arises if that’s possible, Steinberg suggested going to the Legislature to give that body the authority.

A sales tax for a special or specific purpose needs a two-thirds vote to pass. A general purpose tax needs only a simple majority.

Steinberg said the initiative remains fluid, adding, “This proposal in no way is set in stone."

The mayor said the percentages of how funds are divvied up could change. Cities within Sacramento County potentially could divide their shares in different proportions.

Steinberg estimated the tax would raise $8 billion to $9 billion over 40 years. The money would be divided roughly in thirds between the three goals.

Of the up to $3 billion for housing, three-quarters of that would go to efficiency housing, like modular buildings; permanent supportive housing; affordable home ownership opportunities; low and very-low income housing; student and workforce housing; and mixed-income projects.

The remaining one-fourth of the money would go toward keeping people housed. That could include housing rehabilitation and repair, emergency rent payments and mortgage assistance.

“Prevention is a big part of the cure here,” Steinberg said. “Let’s keep people housed so the problem does not grow worse."

The up to $3 billion for public transit and innovative transportation would fund the expansion of rapid transit corridors for buses and dedicated bus lanes that preempt traffic signals, the expansion of service and frequency on existing transit lines, fleet replacement and an express bus service.

The final third, up to $3 billion, would fund safe streets and active transportation. That would include protected bicycle lanes; walkable streets with sidewalks; almost 250 miles of new paved trails; car sharing; and road repairs, with a focus on disadvantaged neighborhoods.

It’s unknown if a pending constitutional amendment would impact the vote threshold required by Steinberg’s proposal, though it appears unlikely to reach the ballot in time.

Assembly Constitutional Amendment 1 would, if passed by voters, lower the threshold from two-thirds to 55% in local elections for general obligation bonds and “certain special taxes for affordable housing, public infrastructure and permanent supportive housing projects,” an analysis stated.

The bill is currently in the state Assembly Appropriations Committee. It’s next set for a Sept. 1 hearing.

A constitutional amendment requires a two-thirds vote of both legislative chambers and a simple majority at the polls to pass. It would become effective five days after the certification of the election.

That means the amendment must be on the March ballot for it to have any potential effect on Steinberg’s sales tax proposal.

In order to reach the March ballot, it must gain the two-thirds vote of both legislative chambers before they adjourn Sept. 14.

Natalie Adona, Nevada County clerk-recorder/registrar of voters, said it’s her understanding ACA 1 wouldn’t reach the ballot until November 2024.