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Yolo supervisors weigh transient‑occupancy tax and longer‑term sales tax to help close $35.7M gap
Summary
Board members asked staff to develop ordinance language and timelines to consider raising the unincorporated transient‑occupancy tax for the November ballot and to further study countywide sales tax and other revenue options, while staff cautioned about legal and timing constraints.
Supervisors asked county staff on May 5 to further analyze near‑term and long‑term revenue options to help close an estimated $35.7 million general‑fund shortfall for FY 2026–27. The revenue generation ad hoc subcommittee and county administrator highlighted a mix of technical, legislative and political steps needed before putting measures to voters.
Alex Stengel, from the county administrator’s office, outlined the subcommittee’s early work: a proposed technical correction to the Educational Revenue Augmentation Fund (ERAF) allocation that Senator Cabaldon has advanced as budget language—staff estimate that correction could yield about $3 million annually for Yolo County if enacted—and potential changes to the transient occupancy tax (TOT) in unincorporated areas. The county’s current unincorporated TOT rate is 8%; Stengel presented an option to raise it to 12% to align with neighboring jurisdictions; staff estimate an unincorporated TOT increase to 12% could generate roughly $250,000 annually for the county general fund, and would require ordinance changes and meeting a June ballot‑measure deadline for November placement.
Supervisors generally supported exploring a November 2026 TOT ballot measure for the unincorporated area while cautioning that a countywide sales tax would require additional legislative steps because two of the larger cities are at the sales‑tax cap. Supervisor Frerichs said raising TOT would be modest but “every bit is essential” and urged staff to prepare ballot language, while others said the county must sequence options so it does not overtax the unincorporated community or exhaust political capital.
Board members also asked for further study of restricted fund balances, juvenile‑hall utilization (both as cost‑savings and potential revenue by housing out‑of‑county youth), and Medi‑Cal billing enhancements—Yolo staff noted other counties have generated significant reimbursements by strengthening billing teams. Several supervisors proposed exploring furloughs and golden‑handshake retirement incentives as part of an overall strategy; staff warned these are complex to implement and only bridge gaps temporarily and noted pension/trust implications.
Next steps: staff will return with ordinance language and a timeline if the board wants a TOT measure drafted for the November ballot, and the ad hoc will continue evaluating sales‑tax options and other revenue pathways alongside additional analysis of restricted funds and Medi‑Cal billing potential.
Ending: No final decision was made May 5; the board directed staff to return with more detailed analyses and potential ballot language for future consideration.
