Ukiah sales tax hike imminent but not its revenue

Ukiah shoppers will begin paying more sales tax on their purchases Saturday, but the money it generates - estimated at $2.5 million annually - will be held in escrow until a lawsuit challenging it can be resolved.

At issue is whether the tax, approved by voters in November, is slated for general city expenditures or a special tax dedicated to specific uses.

A general tax requires a simple majority of the vote while a special tax requires two-thirds of the vote. Measure Y, which increased the city’s sales tax to 8.37 percent, passed with just under 52 percent of the vote.

City officials contend it’s a general tax because Measure Y does not mandate how the tax revenue will be spent.

But the Howard Jarvis Taxpayers Association lawsuit, filed in January, alleges the city attempted to skirt the law by placing a second measure - Measure Z - on the ballot that tells city officials how to spend the money. It asked voters whether they wanted the money spent exclusively on street repair and maintenance, and related public infrastructure improvements.

Measure Z is purely advisory and unenforceable, but the taxpayer group said it misled voters.

The group lost a similar challenge in Santa Clara County in 1998.

A trial date has not yet been set in the Ukiah case.