Higher sales tax now in effect

Short of going out of state, California consumers cannot avoid the new quarter-cent sales tax increase that went into effect on Tuesday.

Consumers started paying 1 cent more in sales tax for every $4 spent.

And at least in Colusa County, merchants do not seem to be terribly concerned that the increase will impact sales.

"Not by any means. They would have to go to Oregon or Nevada to get away from it, and with gas prices, I don't think it is worth that," said Tom Reische, coowner of Messick Hardware in Colusa.

Even car dealerships, at which the purchase of a $40,000 car would add only $100 to the sales tax, are fairly confident the impact will be minor if anything at all.

"It is just what it is, and we will have to deal with it," said Tom Wayman, general sales manager for Hoblit Motors in Colusa.

If anything, Wayman thinks the new law may have helped boost sales in December, although in an agricultural community like Colusa County, December is a busy month anyway.

"Our December business did pick up because a lot of people are trying to get in under the wire," Wayman said. "But December is usually pretty busy anyway because people are trying to spend their money for the tax write-offs."

The one area of concern could be with restaurants, but the owner of Louis Cairos said it is less about Proposition 30 and more about the cumulation of other cost increases.

"In and of itself, I would say probably not," said Cristy Edwards, co-owner of the Williams restaurant. "But when you add it to all the other things ... and put it in conjuntion with all the other taxes, like the unemployment taxes, I think it does have an impact."

However, she does not think Proposition 30 will necessarily keep people from coming to Louis Cairos, where a total bill of $100 would only add 25 cents in extra sales tax.

Prop. 30 also raises the income tax rate on those who make $250,000 or more over the next seven years.

The measure is expected to generate billions in new revenue — $8.5 billion in the first year alone — with the funds earmarked primarily for schools up through community college.

However, the measure also created a constitutional funding protection for state realignment, a program by which low-level felony offenders serve sentences in countty jails rather than state prisons.

It also sends some parolees back to county Probation Departments to handle.

Gov. Jerry Brown has promised the state will pay for the realignment mandate, but he also made it very clear during the campaign that Prop. 30 was designed to help the schools.

How the Prop. 30 funds are ultimately split will be under a watchful eye of schools and county officials alike.

Moreover, the state budget is projects to have another deficit for the 2013-14 fiscal year, officials reported, so there has been some concern that the state will "rob" that funding source for other purposes.

Opponents of the measure campaigned on a platform that there is no guarantee the taxes generated will go to schools as promoted.

State voters approved the initiative with 55.3 percent of the vote, although in Colusa County, the measure failed.

Reische said that has crossed his mind, but does not see local residents not buying what they need just to protest the new tax.

"I don't think people are going to stop buying (what they need) just to refuse to pay for it," Reische said.