Sales tax a bigger piece of the financial pie charts

January 12, 2019

DIXON – Overall sales tax generated in the city is up nearly $1 million from a decade ago, and the mayor wants to take a closer look at the numbers in Dixon and surrounding cities to help continue the upward trend.

City officials have been talking about the importance of boosting sales tax revenue for years as it has the most potential for growth – the city can’t make bigger hikes to property taxes like other communities because Lee County is capped under the Property Tax Extension Limitation Law, which means increases are usually restricted to the percent of inflation.

The goal is becoming more prevalent as pension obligation costs continue to increase and take a bigger bite out of city revenues, leaving less for capital projects and infrastructure work.

Growing sales tax revenue is tied to growing economic development and tourism by adding more businesses and opportunities that bring in visitors who spend money in Dixon.

Sales tax revenue from fiscal year 2018 was just north of $3.4 million, about 4 percent higher than FY17.

Mayor Li Arellano Jr. said greater investments the city has made with attracting or expanding businesses as well as increasing cultural and tourism events are paying off with larger sales revenue numbers across the last few years, but the city needs to target more ways to keep the momentum going.

City Finance Director Becky Fredericks recently compiled sales tax data for the last decade, and Arellano said the next step is to research sales tax trends for other area cities, compare them with Dixon, and take a look at what other communities are investing in.

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