How has Modesto done in its spending of voter-approved Measure H sales tax increase?

Modesto has kept its word on how it said it would spend Measure H, the 1% sales tax increase that voters approved in November 2022.

City officials said the tax would be spent on parks, public safety, homelessness, reducing blight and other quality-of-life basics.

The tax has allowed Modesto to begin restoring some of the services it cut as it struggled on a yearly basis to balance its general fund budget. City officials have said the sales, property and other taxes and fees that make up the fund have not fully recovered from the Great Recession of more than a decade ago.

That meant less money for parks, trees and other basics as the city tried to maintain public safety spending. But because of Measure H, Modesto is spending $10.4 million in its park improvements this year, its biggest investment in its parks in at least 20 years.

Measure H is expected to bring in nearly $42 million in the city’s current budget year, which started July 1. That is in addition to the $10 million the tax generated from April 1 — when it took effect — through June 30.

For context, the city’s operating budget is nearly $526 million, with $184 million of that made up of the general fund. That’s the one fund city officials have wide discretion in spending, though the majority of it is spent on public safety.

Though Measure H is a general tax and therefore part of the general fund, Modesto is accounting for the tax separately to show how it is being spent. And as part of passing the measure, voters also approved forming a nine-member citizens oversight board to monitor spending.

The tax does not have an end date. It would take another election to end the tax. Here are the highlights of how Modesto has allocated and is spending the $52 million:

▪ $10.4 million for parks and recreation. That includes replacing eight park playgrounds at $2.5 million, replacing the three synthetic soccer fields at Mary Grogan Community Park for $1.5 million, replacing three park bathrooms at $1.4 million and renovating the Maddux Youth Center at Cesar Chavez Park for $350,000.

▪ $9.8 million for public safety. That includes $3 million for the eventual replacement of Fire Station No. 1, which is more than 80 years old, $2 million for a new dispatch center, hiring five additional community service officers at $419,000, $1.17 million for 15 police office recruit positions and $451,000 for a rental housing inspection program.

▪ $6.2 million to cover what the city calls the general fund’s annual structural deficit. The fund’s sales, property and other taxes and fees are not growing as fast as the fund’s expenses, primarily employee compensation, including pension costs. The city estimates the structural deficit will be about $9 million within four years.

▪ $3.95 million for homelessness. That includes four additional park rangers at a cost of $245,000, bringing the total number of allocated positions to a dozen, $350,000 to the Downtown Streets Team, which helps homeless people turn their lives around, and $3 million for the cost of building and setting up tiny homes. But that project is contingent upon the city finding partners willing to provide the property for the homes, as well as service providers and site managers.

▪ $2.3 million for forestry. That includes nearly $750,000 to hire an additional pruning crew and an additional forestry crew as well as $1.55 million for a contractor to help reduce the backlog in pruning city trees.

▪ $1.8 million to repair damaged sidewalks at 400 locations. The city says it has a backlog of 4,800 to 4,900 locations in need of repair.

Modesto expects to receive $11 million more in Measure H funding in its current budget year and has not allocated that money.

How Modesto made ends meet before Measure H

Before voters approved Measure H — it received nearly 63% of the vote, though it needed only a simple majority to pass — the city balanced its general fund through such measures as freezing or eliminating open positions, deferring maintenance and reducing services. For instance, the city has said it has more than $70 million in deferred park maintenance.

City Manager Joe Lopez warned in 2022 that after years of cuts in other departments, the city had reached the point where the brunt of the cuts in future years would be in public safety.

Measure H also has given the city flexibility in how it spends its other general fund money.

In June, the City Council approved labor agreements for the majority of its employees that will cost the city $92.3 million over four years, with about $50 million of that coming from the general fund. But Budget Manager Steve Christensen said the general fund also has been helped by growth in property, business and other taxes.

City officials said the labor agreements were needed because Modesto’s compensation had fallen below what comparable cities paid their employees. Officials said the agreements allowed the city to keep and attract good employees.