Some cities rely on the revenue generated from car sales more than others, but the sales and activity has its effect on all local governments.
“I suspect it should have a positive effect in some way,” said Mike Columbo, Economic Development Manager for the City of Vacaville. “Every car that sells is a good thing.”
Columbo noted that although the program has been posed as an opportunity to put more environmentally friendly cars on the road, it is an opportunity to create activity in auto sales.
Columbo said he expects the program will make is an increase in the level of activity to the auto dealerships.
“I talked to one dealer and my impression was that activity was up,” said Columbo.
Vouchers up to $4,500 are given to buyers who trade in their clunkers and purchase a more fuel-efficient vehicle. The program was scheduled to run until November 1, or until the $1 billion budget runs out.
The Federal Government is now faced with the decision of whether or not to extend the program since the $1 billion budget nationwide is nearly met.
Sales tax revenue generated from auto sales in the City of Vacaville is projected to decline from 10.2 percent in the 2008-09 fiscal year to 9.9 percent in 2009-10, said Columbo.
In the City of Clovis, $300 in sales tax revenue is to go to the city for each car purchased under the program.
Clovis City Manager Kathy Millison said 40 percent of the general revenue for critical services such as police and fire come from sales taxes.
She went on to say that 40 percent of that, or more, is from sales taxes from auto purchases.
Columbo said that he won’t be able to tell what the value of the program has been for the city for several months, but he stated, “I don’t think it is creating a lot of revenue.”
Louis Dettorre can be reached at ldettorre@publicceo.com