Frequently Asked Questions

Why is a group of citizens putting this measure on the ballot instead of the City Council?

On April 9, 2024, City Council said it is clear that the residents are speaking loudly through our tax measure and that the council would not put a competing tax measure on the ballot. That evening, the entire council said that the Citizen’s measure would be the one for the city’s residents to vote on. They also directed city staff to commence an education campaign about the City of Folsom’s financial shortfall and what a lack of funding would mean for our city.

Folsom Telegraph: Apr 10, 2024 – Folsom City Council throws support behind citizen tax proposal

City of Folsom ENewsletter: May 2, 2024 – Frequently Asked Question: Sales Tax Revenue

Promoting Projects Outside the City Limits

People have asked if Folsom Takes Action is promoting any project outside the City Limits or whether it is affiliated with any project. The answer is simple, No. The residents and citizen’s groups that have initiated and are advancing this measure are not affiliated with any project outside the City boundaries. This grassroots special sales tax measure is solely and exclusively to support Police, Fire and other essential services only in the City of Folsom. Supporting a citizen’s initiated revenue measure to increase Public Safety and advance the Quality of Life in our community is our mission.

Why do we need a tax – can’t the City just be better with its money?

Importantly, Folsom doesn’t have a spending problem we have a revenue problem. A combination of factors, including “the Amazon Effect.” inflation are diverting more of Folsom’s revenues to the state, county or other cities, and other rising costs have brought us to a point where expenses are getting higher than revenues. The city has been taking steps for years to cut costs, and now we have to make some tough decisions – we can raise revenue, or cut more services. As citizens who enjoy the quality of life Folsom offers, high levels of public safety, and the property values that adequate city services create, cutting services or levels of service is not an option.

Doesn’t the City already have a “reserve” for this kind of situation?

Yes the city does have a reserve, however it is meant to get us through temporary emergencies, like the COVID pandemic or the Great Recession of 2008, not to address ongoing revenue shortages. Our reserves are now close to the minimum recommended. If we use the reserve now, there is no money in the pipeline to replace it, or for emergencies – all but ensuring catastrophic cuts to services when there’s another downturn. That is not responsible planning.

These funds also earn interest, providing additional revenue. The higher the reserves, the more interest and revenue we earn to help offset future costs. Maintaining a sufficient reserve is a critical step.

Can’t the City just apply for grants to cover any shortfall?

The city does apply for and does receive some grants, and additional efforts to win grant funds are ongoing. Most grants, however, are generally for new projects and not maintenance needs. In addition, they require the city to provide some portion of “matching funds” in advance. Without revenue to provide these, we don’t qualify to receive these grants. Also, Folsom is not classified as a “disadvantaged community” which, ironically, puts us at a disadvantage in applying for grants.

What have City management and City Councils done to cut costs and save money?

For more than a decade, Folsom’s leaders have been actively working to cut costs, stretch dollars, and ensure a balanced budget, while minimizing cuts to public services. Actions the city has taken include:

  • Reducing staffing levels. The city has 77 fewer employees today than it did in 2008– there are staffing shortages in nearly every department, and all departments are doing more with less, even as our population has continued to increase.
  • Using part-time or contract employees (to save costs on salaries and benefits) whenever feasible.
  • Increasing the employee’s contribution requirements towards their retirement.
  • Eliminating retiree health benefits for new employees.
  • Increasing employee’s contribution requirements for their health benefits.
  • Restructuring education incentive pay for cost savings.
  • Extending the number of steps in pay ranges to reduce annual pay increases.
  • Eliminating longevity pay for new employees.
  • Capping accrued leave balances and cash out amounts.
  • Incrementally reducing scopes of services for such contracts as landscape maintenance to match available dollars, which has, and will continue to manifest itself with visible lack of quality, loss of vegetation, and unattractive streetscapes and parks.
  • Deferring millions of dollars of maintenance and capital costs.
  • Extending the “useful life cycle” of city vehicles.
  • Implementing electronic permitting and payment systems to increase efficiencies.
  • Applying for state and federal grants for capital and service needs.

Check out “What’s Been Done” for more information.

How much will the Special Sales Tax cost me and my family?

The Special Sales Tax is one percent, which means one-cent ($.01) for every dollar of taxable purchases. For a household that spends $5,000 on taxable goods in a whole year in Folsom, the extra tax would amount to $50 for the year, approximately $4.17 per month. A household spending $15,000 a year on taxable goods in Folsom would spend $100 more for the year, or $12.50 a month, and a household spending $25,000 a year on taxable goods would spend $250 more for the year, or $20.83 a month. Only taxable goods apply – meaning items such as groceries, medicines and services would be excluded.

What do I get from this tax?

First of all, all the money stays in Folsom. Unlike other, larger forms of government, your city government is a service provider to you – Folsom’s residents and business owners. The purpose of this proposal is to raise revenue to preserve, and enhance a number of these services, including those essential to enhancing public safety, maintaining property values, and for our quality of life.

This proposal would raise $29 million annually, based on current projections – all of which would stay in Folsom and cannot be taken by the state or county. The proposal also specifically requires money raised to be used for public safety – including funding for fire, rescue and emergency services, programs to reduce crime and address homelessness, wildfire fire protection, traffic improvements, park, recreation facility and trail improvements, economic development (to fund and invest in new jobs and revenues that will help prevent us from being in this situation again), upgrades to our stormwater system to prevent flooding and damage to private or public property, and large “capital improvements” (aka large construction projects that enhance the community).

Absolutely NO money can be used to enhance pensions or retirement benefits for current city employees.

Visit “What Does an Extra 1-Cent Get you?” for much more detail.

How do I know this money is going to be used for these purposes?

No one gets a blank check. The proposal requires a nine-member Citizens Oversight Committee to ensure accountability, make recommendations on how money should be used, and prepare an annual report on how funds have been spent.

How do I know this money won’t just go to pensions and salaries?

The text of this proposal is very clear. Absolutely NO money can be used to enhance pensions or retirement benefits for city employees. The proposal also requires the creation of a Citizens Oversight Committee to recommend how revenues should be spent, monitor how funds are used and prepare an annual audit for the public.

How much sales tax is generated by people who do not live in Folsom?

According to data from the Folsom Department of Finance, as much as 40 percent of the sales tax generated every year comes from visitors who also benefit from Folsom’s public services.

Who pays Folsom's Sales Tax
Sales Tax Rates Neighboring Cities Folsom Residents for Public Safety and Quality of Life

What are the sales tax rates in other jurisdictions near Folsom and how would the proposed rate compare to those?

Folsom currently has one of the lowest sales tax rates in Sacramento County, tied only with Citrus Heights.

Doesn’t this just place more of a financial burden on seniors and lower-income residents?

Many of the items these residents need (groceries, prescriptions, healthcare) are not subject to a sales tax. Also, because these residents rely more heavily on city services on a daily basis, the consequences for them are much greater if these services are cut or eliminated. Because all of the funds raised by this measure stay in Folsom and cannot be taken by the state or county, our local residents benefit more.

Didn’t sales taxes actually exceed expectations last year?

Yes, and inflation was also up three times higher than expected as well, so we’re still losing ground.

Can’t we just attract more businesses and generate this sales tax from them?

To meet the city’s revenue needs, we’d need to build a second location for every one of our top 25 tax revenue-generating businesses (Walmart, Sams, Target, Costco, etc.), and then double the number of customers currently shopping at these stores, which is simply unrealistic. Economic development can help, but it doesn’t get us there alone. (Source: MuniServices/Avenu Insights & Analytics)

What about all those houses and other developments going up in Folsom Ranch, south of Highway 50 – where’s all that money going?

Most people aren’t aware the city only receives 20% of the property tax you pay to provide your essential local services. On a $900,000 home, the annual revenue from property tax for the city is $1800. At the same time, these new neighborhoods also need public services (law enforcement, fire protection, parks, etc.) and as a result residential development typically is “break-even.” Property tax revenue, and expenses, for development South of 50 has already been accounted for in the city’s financial projections and the result is a zero net effect. Thus it does not generate additional funds that can be used for needs north of 50.

What about commercial development south of Highway 50?

There are planned medical and commercial centers (UC Davis, Dignity Health) south of 50, however the medical facilities will likely apply and qualify for an annual exemption from property tax under the Welfare Exemption. Beyond these projects, commercial development south of 50 is planned, but will likely take several years to realize. Extra property taxes and sales tax will be realized from the new development but they will be used to provide services to the new residents and businesses being built there.

Is all of our revenue currently going to cover costs for south of 50 development?

South of 50 is self-sustaining, with property tax covering current related operations (such as fire staff for the new station) and development impact fees will cover the construction of planned facilities such as parks, trails and the new fire station. The projected General Fund budget gap is not caused by south of 50 development.

Aren’t there any other options for raising revenues? What about property taxes, developer fees, etc.

Prior to a sales tax, other options were explored, including:

  • Economic development: To meet the city’s revenue needs, we’d need to build a second location for every one of our top 25 tax revenue-generating businesses (Walmart, Sams, Target, Costco, etc.), and then double the number of customers currently shopping at these stores, which is simply unrealistic. Economic development can help, but it doesn’t get us there alone. (Source: MuniServices/Avenu Insights & Analytics)
  • Increase the property tax: While the city’s revenue from property taxes is low (on a $900,000 home the city only gets $1800 in property tax) (source: City of Folsom Department of Finance), laws like Proposition 13 place limits on what can be done here, and it would require voter approval. Also, it’s not fair for property owners alone to pay for services that all city residents and visitors enjoy. (To that point, another key benefit of a sales tax is that up to 40% of the revenue generated would come from visitors outside the city).
  • Increase the Transportation Occupancy Tax (TOT): The TOT is a tax paid by visitors on their hotel bills. Increasing the TOT would also require voter approval, but even if we doubled the current TOT, that would only bring in an extra $2-$2.5 million annually, (source: City of Folsom Department of Finance) not enough to provide for future, long-term needs.
  • Developer Fees: Otherwise known as impact fees, these are collected and used for facilities to serve the new homes and neighborhoods. Developers also pay the new development’s percentage of costs for shared and expansion of existing facilities. Developer fees cannot be used for existing facilities or shortcomings.

With these options all coming up short, and with the community’s preference to maintain and improve service levels rather than cut them, increasing the sales tax presents the only realistic and reasonable option.