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Train Tall Tales
Dave Druker | 10th Street

 

The Railway Station.  Watercolor Mac McMillan

 

Recently Council Members Hilliard and Filanc initiated a request to the North County Transit Board (NCTD) to get approval for a seasonal train stop at the old Del Mar train station. As many had predicted, NCTD denied the request. Referring to the old station, which closed in October of 1995, Hilliard said “When the station closed our sales tax revenue plummeted.” **

(from an article by Bianca Kaplanek dated Feb 03, 2012 in The Coast News)

The facts, though, are quite different. After the train station closed there may have been a slight decrease, not sudden or steep, and the sales tax quickly recovered. The change in sales tax had no effect on the overall tax revenues of the city.

Sales tax revenue from July 1994 through June 1995 was $917,586. Total tax revenue including property taxes was $3,180,374.

Sales tax revenue from July 1995 through June 1996 was $886,984 a decrease of 3.34%. Yet total tax revenue increased during this same period to $3,313,227. Of this increase about 54% can be attributed to property tax revenue increases with the other 46% being TOT, business license and franchise tax (with TOT being the major contributor to revenues).

From July 1996 through June 1997 sales tax increased to $1,016,039 a 14.55% increase from the prior year and a 10.73% increase from the closing of the train station. From July 1997 through June 1998 sales tax increased by another 14.15%.
Many people still believe the myth that a major driver of sales tax and Transit Occupancy Tax (TOT or hotel tax) was the train station. The Finance Committee did a study around the same time the train station was closed and determined that at most the train station generated about 10% of sales tax, which would translate to about 1% of sales tax revenue for the city.

It is time to put this myth to bed and understand that the main driver of sales tax revenue has been, and continues to be, the fairgrounds ~ followed distantly by restaurants.

** Plummet: a. To fall straight down; plunge. b. To decline suddenly and steeply (from The American Heritage Dictionary).


 

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