Earlier this year, the Amador County Board of Supervisors approved a new commercial subdivision on part of the old lumber mill site at Martell. The project # the Sierra West Business Park # is the future home of Prospect Motors of Jackson and Amador Motors of Sutter Creek. While the car dealers are located in the cities, the more than $260,000 in local sales tax they pay goes to the city general funds and supports essential city services. When the dealerships move to Martell, the revenue will be allocated to the County.

Sierra West was approved prior to the supervisors' adoption of countywide traffic impact fees (see next article). Traffic impact fees for the project were set well below those recommended in a traffic study costing nearly $28,000.

Sales tax rebate proposed

In September, well after time had elapsed to legally challenge the inadequate impact fees, a special county ad hoc committee # supervisors Mario Biagi and Richard Vinson # proposed that the County rebate to the project developers $1.4 million in local sales tax revenue over seven years ($200,000 a year). The reason? "Jobs," said the supervisors, though it is difficult to see how moving car dealerships to Martell is a job-creating activity. The developers also promised to make certain infrastructure improvements to the site and to allow other businesses that locate nearby to take advantage of those improvements.

New law intervenes

Before the supervisors acted, however, Governor Davis signed into law AB 178, which specifically addresses this kind of tax-rebate scheme. AB 178 requires localities that offer financial incentives to car dealers relocating within a market area to share the net local sales tax with the former location of the dealership, for ten years.

Although the law doesn't go into effect until January 1, the supervisors decided to comply with it. Now the County will develop an agreement to rebate $1.4 million in sales tax revenue to the developer over ten years. Over that same ten-year period, the County will split the remaining sales tax revenue from the car dealership equally with Sutter Creek and Jackson. Each entity is expected receive $40,000 a year.

We were glad to see the supervisors agree to comply with AB 178, which passed the state Legislature with only one "no" vote. It is obviously bad public policy to take sales tax monies that now support essential services in the cities and hand them over to a developer and a car dealer - even in exchange for infrastructure improvements. We hope the sales tax sharing arrangement mandated by AB 178 will lead to more serious discussions of revenue sharing among local governments, something we have vocally supported since 1993. Competing for sales tax producers hurts our communities and inhibits sensible land use planning.