LAKE COUNTY ? A 1-percent sales and use tax increase is set to take effect Wednesday, and local business owners say they are ready.
Governor Arnold Schwarzenegger included the increase in the state budget, approved in March. It will expire on July 1, 2011, unless voters pass Proposition 1A in the May 19 special election. In the unincorporated areas of the county, sales tax will go up to 8.25 percent. In Clearlake and Lakeport, where voters previously approved .5-percent sales tax bonds, sales tax will go up to 8.75 percent.
“The way it”s set up, none of it comes back to us at all,” Lake County Administrative Analyst Doug Willardson said of the increase. He explained that the money will go into a state fund, rather than coming back to county government.
The proposition is a constitutional amendment proposed to stabilize the state”s budget. If voters approve the proposition, it will expire on July 1, 2012, according to the state Board of Equalization”s Web site, www.boe.ca.gov.
The increase will bring the state”s reserve fund from 5 percent of the state”s revenues to 12.5 percent, the equivalent of a $4 billion increase, according to the state Legislative Analyst”s Office.
“We”re being pennied to death,” owner Victoria Philipp of Caf? Victoria said.
Philipp said the restaurant”s business has been steady despite economic downturn, but already customers have been talking about taxes going up.
“By itself it seems like a small matter, but what the problem continues to be is a collection of issues. The economy doesn”t allow things to settle or digest before we get another hit. A penny (on the dollar) sounds like a minute thing, but it sounded minute when they raised the price of stamps,” Philipp said.
Philipp considers her business a “community caf?,” offering customers discounts at her discretion, depending on each person”s situation. She said with the price of supplies rising, and with the prospect of paying an increased sales tax, that will become harder to do.
General Manager Travis Lipscomb of the Blue Wing Saloon and Caf? in Upper Lake said the economic downturn has meant he”s already had to be more creative about getting people through the door.
“It”s hard to predict how it will affect us because it”s not in place yet. Any kind of increase in tax is going to affect business in some way,” Lipscomb said.
He said business has been on a steady incline since the restaurant went into business three years ago, and continues to rise in spite of the downturn in the economy.
Contact Tiffany Revelle at trevelle@record-bee.com, or call her directly at 263-5636, ext. 37.
