Eureka Sales Tax Revenue Reflects a Soft Economy; Police Plan Increased Enforcement on 101 Corridor
Graph showing drop in Eureka’s sales tax revenue
A mid-year budget review by the Eureka City Council highlighted the nexus between economic development and city services, with sales tax revenues seeing a drop since the 2021-22 fiscal year. Councilmembers also heard a presentation from Eureka Police about a stepped-up traffic enforcement effort along the Highway 101 corridor through the city.
While most of the city’s budget funds are expected to be in the black when the fiscal year ends on June 30, the General Fund, which pays for staffing and city services, “presents a more challenging financial outlook,” according to a written staff report.
The situation was described to the city council when it reviewed the current year budget at its March 3 meeting.
Sales tax makes up the majority of General Fund revenue and Finance Director Lane Millar said it’s a source the city is “very reliant on” and one that also “tells us what’s going on in the economy.”
Overall sales tax revenue has declined by almost $1 million since the 2021-22 fiscal year. When the 2023-24 fiscal year is used as a base year, sales tax revenue is flat through the current budget year’s forecasted end.
It shows the local economy is sluggish.
“These are taxable sales that happen at all the local businesses, and when business is good, we receive more tax revenue and business is bad, those numbers go down,” said Millar.
Doing the calculation using only the city’s one percent share of in-store sales, the tax revenue dropped by $915,000 from 2021 to 2024.
“We are not unique in this situation,” Millar said.
Graph showing drop in countywide sales tax revenue
In the county unincorporated area, the tax revenue dropped dramatically, by $1.7 million over the time period.
On a countywide level, in-store sales tax revenue fell by $2.9 million during the four-year time period, which means countywide sales dropped by $290 million.
Graph showing drop in countywide in-store sales tax revenue
“This shows us why economic development is so important up here, because most of the agencies rely on the sales tax to keep their operations whole,” said Millar. “And until we see a turnaround in the economy, we’re likely to see flat or very low growth in this category.”
Millar says in his written report that “overall, the General Fund’s financial position has weakened” and he’s predicting that the ending fund balance will “likely fall below” a policy threshold.
“Staff has already begun strategizing on future expenditure reductions,” says Millar in his written report.
The city will save some money through leaving vacant staff positions unfilled but Millar says “these gains are being entirely offset by high overtime demands” and “as a result, we project a net overage in personnel costs by the end of the fiscal year.”
The council approved mid-year budget changes to staff-related spending.
Also at the meeting, Eureka Police Commander Leonard La France gave a presentation on Operation 101 Gateway, which will put a focus on traffic enforcement on Broadway, Fourth and Fifth streets, and adjacent streets.
La France said despite having “really, really ramped up” traffic enforcement last year, city collisions only dropped by one to two percent.
There have been 10 fatal traffic incidents on the 101 corridor through Eureka since 2020 and La France said “for a city our size, 10 fatals on one corridor is not positive so we need to change that.”
He said traffic enforcement has already increased by 241 percent since 2024 and “you’re going to see a lot more focus on enforcement in the corridor.”
Code enforcement will also be part of the operation with a goal of “removing blight.”
During a public comment period, Colin Fiske of the Coalition for Responsible Transportation Priorities said concentrated enforcement only has a limited impact.
“That effect doesn’t last after the high visibility enforcement ends,” he continued. “The most effective way to reduce traffic injuries and deaths is redesign of infrastructure.”
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Eureka:
“for a city our size, 10 fatals on one corridor is not positive so we need to change that.”
They ought to be able to make that up, in speeding tickets alone…
How do you magine that revenue offsets 10 deaths?
A constant police presence would be a powerful deterrent to those selfish asshole drivers, so yes, it would offset.
That’s just the fatalities. How about the several millions of dollars in damage to vehicles in the bazillion wrecks from the old Kmart to Target along the same corridor? Some days there’s multiple incidents. This city is too small to be having that level of traffic problems. Yet all I hear as a fix is more roundabouts. Sure. That’ll stop the people that ignore lights and signs already.
Throughout the years, I would have like to have read about creative ways that would have been focused heavily on bringing business opportunities here to create a healthy business environment that would bring in revenue. Of course, that is what is needed to bring in sales tax revenue. Instead, all I have about is concentration on trails and bike lanes. Connecting dots would be a good start.
Seems like a large portion of our residents would rather be poor with a pristine environment than prosperous and generating green energy or raising farmed fish. I’d choose prosperity myself.
I choose clean air and an unpoisened enviornment.
The windmill thing offers another boom that will bust once construction is done and is of dubious long term value to us locally. The fish farm was far from just a local government problem, the company also abandoned their plans for their east coast farm and it seems like their model relies on very rosy projections rather than sound business economics.
There is slow progress toward wider aquaculture in and around the bay though and I hope that our county government will make sincere efforts to support and enhance that development
Almost every line in the article is something to say wow to, as in wow, that’s really bad, or wow, that’s really stupid, or wow, what were they thinking.
There are too many points to make in relation to this article but here are some at least:
They’ve increased the sales tax rate, and sales tax revenue has declined.
This article is almost directly saying they are looking to wring more money out of the people through predatory traffic enforcement and predatory building code enforcement.
The article also shows that that the targeting of drivers for extraction of extra money has not only made no difference in safety for people, but things have still gotten worse despite the stepped up hunting of drivers by the police.
The article also admits that the traffic accidents in the area, especially the serious ones, are way out of proportion to the size of the local population.
The city admits to being reliant on sales tax, yet they allow the old guard to run things in such a way that won’t allow for new businesses to enter the area that will compete with their older businesses, compounding the tax situation in several ways.
The declining tax revenue should be an indicator of the state of the local economy yet no effort is being made to do anything about the local economy in any significant way and what is done is a joke.
The house prices in the county are stupid high considering all these factors and what all these indicators are showing, especially considering the discussion of expansion of wringing more money out of tax payers after the increase of sales tax by further increasing money extraction through police traffic law enforcement and building and city code enforcement. The county being understaffed will also make the processes of building permitting and plan reviews much more cumbersome, inefficient, and probably out-right dysfunctional.
Sales tax makes up the majority of General Fund revenue and Finance Director Lane Millar said it’s a source the city is “very reliant on” and one that also “tells us what’s going on in the economy.”
Way to govern and navigate through the rear view mirror people.
It shows the local economy is sluggish.
These people are really astute, aren’t they.
“These are taxable sales that happen at all the local businesses, and when business is good, we receive more tax revenue and business is bad, those numbers go down,” said Millar.
Thanks for that deep insight professor. Where would we be without these people?
“We are not unique in this situation,” Millar said.
You’re right, there are a lot of stupid people out there. The problem is letting them run things and make important decisions. Still right though, there are a lot of stupid people in government.
In the county unincorporated area, the tax revenue dropped dramatically, by $1.7 million over the time period.
I bet nobody saw that coming considering the thriving cana-tourism that has taken over, and all the fine weed ‘terroir’ that people are dying to pay earlier 2000’s prices for.
“This shows us why economic development is so important up here, because most of the agencies rely on the sales tax to keep their operations whole,” said Millar. “And until we see a turnaround in the economy, we’re likely to see flat or very low growth in this category.”
Again, somebody get this guy an extra honorary degree or something. He’s in need.
Millar says in his written report that “overall, the General Fund’s financial position has weakened” and he’s predicting that the ending fund balance will “likely fall below” a policy threshold.
Hey, thanks captain obvious. Actually, maybe I don’t quite understand. Are you telling us less means less? What is a “policy threshold?” Sorry, I’m not in government so I am ignorant about these financial terms. Do you mean to say “we’re going to have less money and that is not as good as having more money?”
“Staff has already begun strategizing on future expenditure reductions,” says Millar in his written report.
Ha, that’s funny. Strategizing. Show me one strategy in many years that any of the staff have ever come up with. Strategizing involves many factors, some of the most important ones would be critical thinking and ability to assess situations. I don’t think any of those things are reasons why they have their jobs. It’s nice that they can strategize on how to make due with less revenue, instead of being able to strategize in the past on how to improve the situation before this has happened. I’m sure the war room is going to be busy with all this thinking and strategizing going on now. The zoom calls, home offices, and swivel chairs are going to be taking a lot of wear and tear now.
The city will save some money through leaving vacant staff positions unfilled but Millar says “these gains are being entirely offset by high overtime demands” and “as a result, we project a net overage in personnel costs by the end of the fiscal year.”
See, you really can’t fix stupid. Let’s save money by spending considerably more but getting even less than if we just spent even a little more to maintain the current level of function. This is probably the result of the above mentioned “strategizing” going on among those great thinkers.
He said traffic enforcement has already increased by 241 percent since 2024 and “you’re going to see a lot more focus on enforcement in the corridor.”
“La France said despite having “really, really ramped up” traffic enforcement last year, city collisions only dropped by one to two percent.”
No need to even comment on this one, they commented on it themselves.
Code enforcement will also be part of the operation with a goal of “removing blight.”
The biggest blight is in the people who are governing. They didn’t care about the blight before, so why is it all of a sudden something to focus on when people have less money to spend to on improvements.
During a public comment period, Colin Fiske of the Coalition for Responsible Transportation Priorities said concentrated enforcement only has a limited impact.
So they are admitting beforehand that their approach is not going to make a significant difference, except maybe piss off more people.
“That effect doesn’t last after the high visibility enforcement ends,” he continued. “The most effective way to reduce traffic injuries and deaths is redesign of infrastructure.”
Say what? How do they go from discussing the first point and jump to that point? Who says the solution is just in redesigning infrastructure. They already admit they don’t have enough money. This is an example of the saying “if all you have is a hammer everything looks like a nail.” Choosing the most expensive possible activity when short on income is a stroke of pure genius.
https://transparentcalifornia.com/salaries/2024/eureka/lane-millar/
Wowza, maybe these geniuses need to spend more of their unearned pay in the local economy. I wonder how much he’s given Amazon in th last year …
This is just City of Eureka employees’ salaries. (I was surprised that the mayor and councilmembers don’t get paid much)…There’s also the County employees. Cal Poly administrators. State of California top salaries. ALL paid by the taxpayers….https://openpayrolls.com/rank/highest-paid-employees/eureka-ca
Goverment and C-level people are one of the few places where you can get a raise and absolutely screw things up.
IMHO:
Step 1:
Eureka needs some mulching machines.
Eradicate the ‘swamp growth’ between 101 and the bay.
Couple CATS in there… level the ground.
Go around Eureka and do the same thing on other brush infested areas.
That will fix ‘the problem’ pretty quick.
Step 2:
Move 101 over and run it along the bay.
Nothing of interest in there anyway.
Then just leave the ‘strip mall’ on Broadway… which will just be a ‘street’.
Big Yellow Taxi – Joni Mitchell
https://m.youtube.com/watch?v=ratQlft_G5c
Ramping Up speeding tickets and traffic enforcement in the busiest part of the city is your plan to make the city more money?! So now if I visit your crappy town I have to not only continue worry about my safety, getting my car stolen or broken into, getting harassed by the derelicts that make eureka eureka, but your now police have a directive to fleece my pockets as well? Great plan eureka! This will surely fix all of your problems and encourage the masses to come spend, spend, spend! I like everyone else right now am grabbing my hat and coat and wallet and heading to the great city of EUREKA!!
How can one city be so incredibly stupid for so many decades? It is truly Eureka’s greatest feat.
A Victorian city surrounded by California redwoods,on the Pacific Ocean, and with a huge bay. Hmmm.
The people we’ve elected to govern are bastions of virtue and that’s more important than sound fiscal policy … come on, man, where you been?
Our town is beautiful with a big asphalt gash peppered by drug addicts out in full force.
But dang, aren’t we so nice to let them live their lives out loud 🙄
Harris to Harrison to Myrtle…
” Eureka Bypass “…
Just skip the whole thing…
I don’t know how you folks in Humboldt county can make it money wise. I was traveling through to Oregon and stopped for 2 mcdonalds breakfast sandwiches. The taxes were %10.25 and then the gas prices are out of this world and guess what they are going up even more! I will not be buying anything while driving through. The whole area seemed really down. Good luck
While gas is certainly more expensive here, the tax on McDonald’s is everywhere in California as sales tax on McDonald’s is State approved- the state takes 6% and, of the extra 4% that goes to the county and city, Humboldt Co’s rate is bit higher than the average but less than LA. It certainly won’t break anyone’s budget on two egg mcmuffins. Good luck with that planned drive though without stopping. Don’t forget to wave!
Fill up in Ukiah- Costco or Coyote Valley and drive straight through to Oregon or at least the casino in Del Norte and you just saved at least $25 in gas. Drive around Eureka- Ridgewood /Walnut/ Harrison/Myrtle- and it’s quicker and more scenic. I know lots of people who already blow right through like that…They have seen enough and plan ahead
The cool thing about buying casino gas is that they don’t sell California-formulated gas. They sell the good stuff you find in Oregon. Gets more MPG from your car and it’s better on your engine. Just one more way CA has devolved from it’s golden times…
“The whole area seemed really down”
says the guy from southern OR- ok bud
Take a look at Crescent City and Brookings and tell me which side of the border you’d rather live on.
That Chetco effect is nice in the summer. One of the few places where you can go from 60 degrees and fog to 100F and still be on the coast in 30 minutes. Brookings is much less depressing to visit than CC.
Interesting that the article doesn’t mention the possibility that consumers are opting out of purchasing in Eureka due to their excessive sales tax as well as their official support for extremely offensive positions on numerous social issues.Shop in Crecent City and there’s an automatic 2% savings ,as well as $1.00 plus per gallon of fuel at Elk Valley and the Smith River Rancherias. Your tax dollars aren’t going to a government promoting a sexual mutilation lifestyle, intravenous illegal drug use or enemies of America.
Thats a 170 mile round trip, 6-8 gallons of fuel so $30+ there, plus about 3 hours of driving. Even if you value your time at only minimum wage thats another $50+ in time. So you’re down $80 before you spend a cent and I’d hope you would value your time more than minimum wage.
Might make sense for large purchases, but the idea of doing that regularly for your simple daily shopping is incredibly fiscally foolish
Possibly you live closer to Crescent City than I do but it’s a 6 hour round trip from my house. Factoring in wear and tear on my vehicle, my body, time away from my business, and gas—that’s a hard sell to drive that far from me and most other folks south of Eureka. Not to mention Eureka is gorgeous. I love all those Victorians, the views of the Bay and chances to squeeze in visits to everything from Little Japan to the Waterfront to the Discovery Shop to the Sequoia Park Zoo.
More than $1 gallon if you head up into OR (example, Safeway in Grants Pass at $3.79 today). Not fiscal for just short trips. But OR gas is a different blend and I’ve noticed that I get 60-70 miles more range on a tank of OR fuel than I do CA. If you make repeated trips and spend a lot of money up there, then the savings can be considerable, what with OR not having a sales tax. Fred Meyer, et al in Brookings gets a fair share of Humboldt money. Eureka is about the cut off for making it worth your time. Otherwise you’re better off-if in SoHum already-going to places like Coyote Valley near Ukiah. Or the tribal station in Upper Lake that’s even cheaper. But then if you’re a homebody all the time, it is an excuse to get out of the house for a day and not everyone wants to worry about nickel and diming everything, just go.
A
Their graph’s timeline is in the covid era, at least half is in the lockdown period. Many businesses never came back after the shut down
Does not take a rocket scientist to understand we are buying elsewhere.
Imagine sales tax increases being bad for local economies.
Gas prices in Humboldt 2.5 or 3 times the national average…
Electricity prices in Humboldt 2.5 or 3 times the national average…
Sales tax increases in Humboldt on top of that…???
Food prices in Humboldt, besides Costco and WinCo 2 or 3 times as much…
Property tax assessments, resulting in property taxes, in Humboldt, way, way out of line, and far, far, above realistic assessment values and taxation amounts, due to the currently greatly diminished actual values…
Why would anyone in their right mind come to Humboldt…???
Why would anyone in their right mind stay..???
Nature. Forests and ocean. Mild climate. It’s beautiful here. And not too many people. I am fighting hard to stay and not be homeless…but everything you said is true.
Humboldts population shrank in this time and its dominant industry fully collapsed.
Those two things will always impede local spending
The cannaimplosion was helped along by yahoos in govt who refused to set a smart plan that could have made us the Amsterdam of America.
From 2020 it’s estimated the county lost 3% to 2024 (wiki link I know, census data pages is too much to surf through). The only population loss per the Census was in 1970 (-5%). 2020 the county grew 1.4% which is the smallest rate of growth in recorded history of the county.
People are leaving, and what’s left is transforming towards an older population, if only using say, school enrollment data (T-S link) I remember when Eureka High had 2000 students in the 80s. Now enrollment citywide is 1/2 of what it was. However the outlier cities like Mck and Fortuna have grown so the demographics have floated around a bit, yet as a whole, we are in fact shrinking.
With a 3% shrink and estimated 4-5% rental vacancy rate, those two things should just about wash the claims that we’re in a housing crisis. That rate too fluxes especially closer to CPH seasonally as it skews the overall data.
We end up with a confluence of issues but some stick out more than they should; higher prices for everything, particularly housing, smaller tax bases to collect revenue from to support everybody, and lack of higher paying jobs at all, let alone one industry, which go right back into everyone’s micro-economy as with the various taxes.
Raise taxes to 50% and push the rest of everyone that pays into them out some more. Go ahead and test that theory, Eureka. It’s not like you’ve been warned for what…50 years, and the data shows it. But do give yourselves a 15% raise for losing money.
It was a massive Green Rush with hundreds of millions of dollars flapping around. Something we were blessed with and will never see again. And we knew it! But did our leaders do anything to set up for the massive decline that was inevitable?? Or did they just hire more employees and expand expenses and give themselves raises and better pensions? It’s really a question worth asking that nobody wants to answer….
I predicted this would be the result of raising sales taxes. The democrats just cant see beyond their noses. They blame it on the economy when in reality people buy less or shop out of state and defer major purchases.
Eureka’s sales tax decline is very similar to the total county population decline over the same period.
It seems much more likely that population loss, demographic shift to older population, less transient spending from seasonal pot workers and buyers, and other impacts of the loss of the weed economy account for this change rather than a 1% change in sales tax
No doubt that contributed, but I also predicted that would be the result of government regulation and taxation of the industry. Personally, Id like to see no marijuana industry in this county. It brings in ten bad people for every decent person involved.
You’re seeing it right now. There’s no Marijuana industry in this county.
I’m not seeing the massive improvement folks like you foretold, but maybe a little more economic decline will get us there
😅👍
Hey- We are FREE and SAFE with “legalization”! And you can’t put a price on that…
Agreed. Everybody I knew who was doing well in weed has either left or has seriously tightened down their spending…And it has not even bottomed out yet! Hard times ahead indeed…
More grift dressed as protection (isn’t that what got us here?). Less stressed drivers might see improvements but not so much money in that. Less feed for the loosh farm.
Let’s call em freedom fines.