Desert Hot Springs voters to consider raising local sales tax

Desert Hot Springs voters will decide this fall whether to approve a one-cent sales tax to help fund city services.

On Tuesday, the City Council unanimously passed a resolution to add a sales tax measure to the Nov. 5 ballot to maintain services such as emergency response, disaster preparedness and pothole repair. If passed, it would raise about $2,400,000 annually.

The city’s current sales tax is 7.75 percent, with 1 percent of revenue going to the city and the remainder going to California and other agencies.

Desert Hot Springs budget review finds need for funds

The city’s budget has been hit by major expenses such as Hurricane Hillary repairs, a new homeless shelter and the purchase of a former Riverside County library building. Cannabis revenue also fell after the City Council approved a tax break on cannabis cultivation in an effort to provide some financial relief to local businesses, which have cited the industry’s struggles due to issues such as high taxes and competition from the black market.

Desert Hot Springs used its reserves to cover an estimated $1.5 million budget deficit for the 2023-24 fiscal year and faces a $1 million deficit for the 2024-25 fiscal year if it doesn’t find a way to fund its homeless shelter without reserves. The city made $3.1 million in budget cuts to help balance the budget, according to a city staff report.

“Desert Hot Springs is one of the fastest growing cities in the region, with a population increase of over 25 percent in the last ten years alone. Businesses have also grown during this time, leading to an increased need for basic services,” said Deputy City Manager Doria Wilms. “Additionally, during this time, the state has cut local funding and given the city unfunded mandates that have cost millions of dollars, and the cost of providing basic services has increased significantly.”

The city surveyed residents and found that 73 percent of respondents agreed that Desert Hot Springs needed more funding. It also reached out to the community through methods such as mailings and community meetings, and gathered feedback from more than 500 residents on their priorities, according to the city staff report.

What’s on the Desert Hot Springs Residents’ Ballot

The Desert Hot Springs Local Control/Fiscal Stability measure is a general purpose tax measure, meaning the council can decide to use the revenue raised to address any city need rather than just a specific purpose like a special tax. If approved, the city must disclose how it is spending the revenue so residents know if it is being used effectively for what it was intended.

According to the city staff report, the measure will be worded as follows:

Shall the measure to maintain fiscal stability and general services for Desert Hot Springs, including maintaining 911 emergency and police services, gang and drug programs, crime prevention and investigation, disaster preparedness, pothole repair, preventing road and bridge closures, preventing homelessness, attracting local businesses by keeping public spaces clean, safe and well-lit, by establishing a 1c sales tax, providing approximately $2,400,000 per year until removed by voters, with disclosure of public expenditures/all funds spent in Desert Hot Springs, be adopted?

Desert Hot Springs isn’t the only city adding a tax measure this election year. Palm Desert voters will have to choose whether to increase their sales tax by 1 percent, and Cathedral City is polling its residents before determining whether to add a half-cent sales tax measure.

Next steps for the city council

The council also approved Tuesday extending its contract with Lew Edwards Group to continue its election consulting work for up to $68,500. The group’s work includes meetings with city staff to review how to communicate election information and drafting three election-related letters.

Desert Hot Springs must file the measure by Aug. 9 so it can be put to a Nov. 5 vote. Arguments for or against the measure must be filed with the city clerk by Aug. 19, according to the city staff report. Rebuttal arguments must be filed by Aug. 29.

Ani Gasparyan covers the western Coachella Valley cities of Desert Hot Springs and Cathedral City. Contact her at [email protected].