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Slight savings expected from lower sales tax

January 03, 2001|By DARREN SIMON, Staff Writer

Imperial Valley residents could see slight savings when they make purchases as the state, in the wake of a $12 billion surplus, has reduced the state sales tax a quarter percent.

County Supervisors' Chairman Wally Leimgruber said the cut is a positive for taxpayers. However, he said he would like to see the state do more for local governments.

"When you allow the taxes to be spent by the consumers, then consumers do have more money in which to purchase what they choose," he said.

"They have earned their money. They have worked hard for their money," Leimgruber said, adding, "The state and federal governments should not be taxing the public to the point where they have such limitations on their expendable income."

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Still, Leimgruber said if the state has such a surplus, it is time for the government to return property tax dollars to local governments. In 1993 the state reallocated those tax dollars to public schools.

Brawley City Manager Jerry Santillan said of the reduction, "In one sense, it is a further injection to get the consumer to purchase more.

"It's an injection for commercial and industrial development," he added.

Santillan said there could be more opportunity for businesses to experience profits. Expanded profits could lead to the expansion of local business.

Phil Carr, El Centro's director of administrative services, said cities will not lose funding from the sales tax reduction. He said cities receive 1 cent on the dollar. He said the state is reducing its own level of sales tax collected by a quarter percent.

Carr said that action could hurt cities if it means the state offers fewer programs to benefit cities because of a decrease in revenue.

The sales tax cut means the state will receive about $1.2 billion less in revenue per year.

Larry Bratton, head of the Downtown El Centro Association, noted a quarter percent decrease is not significant.

Still, he said it could mean products can be purchased for less, which means more spending power for consumers.

However, Bratton noted that sales tax is important to cities because it helps pay for services provided. He said to cut sales tax too much could hurt cities.

Still, he agreed with Leimgruber that because of the state surplus, the state should provide more money to local governments.

Staff Writer Darren Simon can be reached at 337-4082.

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