BUSINESS

Stockton voters approve tax hike to help city emerge from bankruptcy

Residents of Stockton approved a sales-tax increase that officials say will help the city emerge from bankruptcy.

The city of about 300,000 filed for Chapter 9 protection in July 2012, at the time the largest U.S. city to do so. Stockton was later surpassed by Detroit, which filed bankruptcy in July.

Voters on Tuesday agreed to raise the sales tax in the city by 3/4 of a percent, to 9%. The tax hike, which will take effect April 1, is expected to raise about $280 million in 10 years.

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City officials said they will use 65% of the money to hire 120 more police officers, and 35% to help pay off bankruptcy-related debt.

"I think it says a lot about the character of the residents of the city," Councilwoman Kathy Miller said Tuesday night, according to the Stockton Record. "We're tough. We're kind of scrappy. Stocktonians pull their own weight."

The tax increase was approved by 53% of the voters. It had been opposed by fiscal conservatives, leery of the city's past financial mismanagement.

Even though the tax increase would affect every consumer in the city -- it would add $225 to the purchase of a $30,000 car, for example -- just 24% of voters cast ballots in the election.

The tax hike is a key component of Stockton's plan to emerge from bankruptcy, which it filed last month with the Bankruptcy Court. The financial crisis had also been blamed for a spike in violent crime, including consecutive years of record-high homicides.

David Renison, president of the San Joaquin County Taxpayers Assn., argued against it. He told the Stockton Record that his group now intends to closely watch how the city spends the money.

"Our focus is going to change and return to monitoring and reporting as time goes on," Renison said. "One thing we're not going to do is go away. We're always going to be there."

Without the new tax revenue, city leaders said they would have closed libraries, reduced funding to the Fire Department and abandoned plans to hire new police officers.

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