The California sales and use tax is one of the primary sources for financing local governments. When taxable purchases are made locally, Oakley receives 1% of the sale. Purchases made outside of Oakley generate no revenue for the City. So, if you purchase an item in Brentwood or Antioch, the 1 percent that is returned to the city goes to Brentwood or Antioch. It doesn’t matter where the purchaser is from, only the location where the purchase takes place.
Sales tax revenue pays for those things that make our community a great place to live: police, street and landscaping maintenance, senior services, youth activities, parks, arts and community events and much more.
As Proposition 13 and subsequent state laws made property taxes a smaller share of local treasuries, local emphasis had to shift to generating local money from sales taxes. For that reason, even though sales taxes can account for only a modest portion of total city revenues, cities regard them highly because they can represent a major share of their discretionary income. This gives cities an incentive to promote the retention and location of retail businesses within their boundaries.
Where does Oakley stand in sales tax collection? Sales taxes account for about 6 percent of the revenues that make up Oakley’s General Fund. When the economy was more robust than today more than $185 million dollars in taxable sales were leaking out of Oakley and supporting other communities. A 2006 study of sales tax per capita in East County shows Pittsburg receives $120.71, Antioch at $96.13, Brentwood at $95.76 and Oakley at $37.07. Another study done in 2007 by the HdL Companies, who ranks all the agencies (cities and unincorporated county areas) in the state for sales tax collection, has Oakley ranked 459 out of 518. In Contra Costa County the only city collecting less sales tax than Oakley is Clayton.
The sales tax rate in a given California location has three parts: the state tax rate, the local tax rate, and any optional tax rate that may be in effect. In addition to a statewide mandatory 8.25 percent rate, California counties are authorized to levy up to 1.5 percent in local optional sales taxes.In Contra Costa the State Board of Equalization collects and allocates the 9.25 percent that we currently pay. The breakdown is as follows:
- State – 7 percent;
- County – .25 percent;
- City – 1 percent;
- Measure J, (the county’s half-cent transportation sales tax which funds various transportation improvements throughout the county) is .5 percent;
- the last .5 percent goes to BART.
Sales tax is a dynamic revenue source that responds quickly to changing economic conditions. Sales tax revenue grows with inflation and generally expands through business retention and development. However, the current economic condition, with sales tax revenue crashing, showcases what can happen if a community is too dependent on sales tax.
So, the next time you leave the house looking for a shopping or eating experience stay in Oakley and ask the questions; Do you want a larger police force? Buy Local. Do you want extended library hours? Buy Local. Do you enjoy our parks and recreation options (or, you want more/better parks and recreation options)? Buy Local. Do you want a community center? Yup! Buy Local.