City Beat

News, insight and discussion on Sacramento and its neighborhoods

June 15, 2011
Could a 'sin tax' be the answer to Sacramento's arena puzzle?

Would voters here support a tax on alcohol and cigarettes to help finance a new arena?

A bill introduced by Senate President Pro Tem Darrell Steinberg (D-Sacramento) would provide local governments a large pallet of options to raises taxes for schools, public safety and other local services. The tax increases, of course, would require voter approval.

One of those options would be an excise tax on alcohol and tobacco - commonly referred to as a "sin tax" or "public health tax." Voters in Cleveland approved similar fees in the 1990s to fund the construction of baseball, basketball and football stadiums.

Steinberg's bill - SBX1 23 - has passed the Senate, but has not been taken up by the Assembly. It had been seen as a bargaining chip to pressure business interests into leaning on Republican legislators to support Gov. Jerry Brown's proposal to extend state sales, income and vehicle taxes.

As it stands now, only the state can propose raising the taxes on alcohol and cigarettes. Steinberg's bill would also allow counties to propose increasing personal income taxes and taxes on oil, vehicles and medical marijuana.

It's unclear whether an excise tax on booze and cigarettes will be looked at by the arena task force convened by Mayor Kevin Johnson (a task force, incidentally, that Steinberg is co-chairing).

My Bee colleague Torey Van Oot asked Steinberg recently whether Sacramento County could use the bill to fund a new arena.

"I suppose it could, but that's a tough sell," he said.

He added, "Under this bill, it's ultimately the people, and the voters, especially in these tough economic times, are going to be rightfully vigilant when it comes to deciding what to fund and not to fund. Education and public safety ought to be our priorities. If a community wants to take a chance that they can fund some sort of special project, good luck."

Steinberg added that having been through the 2006 campaign in which a sales tax measure to fund an arena here was overwhelmingly rejected by voters, neither he nor Johnson would "support some sort of generalized tax increase to pay for some sort of entertainment facility."

Assemblyman Roger Dickinson (D-Sacramento) added he doesn't think "that raising taxes related to financing an arena are appropriate, just given the times and the priorities. But I do think that places like Sacramento should, if they want to be sustainable financially, have more alternatives."

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About City Beat

Ryan Lillis has covered the city of Sacramento, its 108 neighborhoods and its politicians since 2008. Prior to that, he covered crime at The Bee. A native of upstate New York, Lillis has a journalism degree from the University of California, Berkeley.

Contact reporter Ryan Lillis at rlillis@sacbee.com

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