Paso Robles wants to extend its half-cent road tax past 2025 

Paso Robles city staff pitched extending an existing half-cent sales tax as a way to leverage a potential $56 million bond that could help chip away at more than $350 million in needed road repairs.

click to enlarge

• Screenshot Taken From 'paving The Way—the E-12 Roads Tax Journey'
• TAX FOR REPAIRS Paso Robles has raised millions of dollars for road repairs through a half-cent tax measure passed in 2012. The city is considering asking voters to approve extending that measure on the November ballot. 

"That includes associated utility replacements that can be up to 40 percent of the costs," Public Works Director Freda Berman said during the May 21 Paso City Council meeting. "That's a huge number. ... How do we take a bigger bite of the apple? That's the question."

While a bond wasn't on the agenda for the meeting, it was debated as part of a discussion on whether the city wanted to put a measure on the November ballot that would continue Measure E-12, a half-cent sales tax earmarked for road repairs in the city that sunsets in March 2025. The City Council voted 4-1 with Councilmember Chris Bausch dissenting, to direct staff to bring back the language for a ballot measure to the June 4 meeting.

"If we bond it, that money can be used as a match for grants. If you don't have that, you can't apply for grants," said Councilmember Fred Strong, who added that he was heading to Sacramento that night to talk about those potential grants. "We only have to come up with 20 percent of the money to apply for a grant."

City staff offered the council a handful of options for the measure, including potentially increasing the half-cent tax to a full cent, which could mean up to $24 million a year for road repair projects (with a bond). However, the council questioned whether the city could handle doing that much work at one time.

Currently, with the existing half-cent tax that Paso Robles voters passed in 2012, the city conducts about $6 million in road repairs every year. If the city renewed the measure without a sunset date and took out a revenue bond, that would increase to between $10 million and $12 million per year, Councilmember Steve Gregory said.

"Spending $10 million to $12 million annually on our roads would be amazing," he said.

Bausch and some residents questioned whether a bond was wise.

"There's got to be another way to look at this," Bausch said. "I'm just not really happy about doing a bond and spending that money on debt service to be able to spend $50 million all at once."

But City Attorney Elizabeth Hull reminded the council that the bond wasn't on the agenda and city staff was looking for direction about whether to extend, or extend and increase, E-12.

The measure has raised about $46 million for road repairs in the city since it went into effect and contributed to 27 completed road repair projects. Currently 15 road projects are underway with another two in the hopper and there's about $12 million in E-12 funds left.

If the measure expires next spring, Administrative Services Director Ryan Cornell said that Paso would need to backfill the funding loss somehow—either through general fund dollars or with more of Measure J-20, a 1 cent sales tax that Paso voters passed in 2020 to maintain essential city services in the wake of the pandemic.

"We can't just ignore the roads that we've already rehabbed," Cornell said. "Street lifespan is shortened if you don't maintain it. ... If Measure E-12 expires, it's going to severely impact city operations."

The City Council directed staff to bring the language back to extend the half-cent sales tax without a sunset date.

Paso isn't the only city considering a sales tax measure for the November general election ballot. On June 4, Atascadero also plans to discuss whether it should ask voters to extend an existing half-cent sales tax that's earmarked for roads and set to expire in March 2027. On May 28, Arroyo Grande is slated to vote on a potential ballot measure of a 1 cent sales tax for infrastructure.

According to Paso Assistant City Manager Chris Huot, the county recommends that cities get ballot measure language in by June 18. Δ