Measure P

Measure P is a general 1% (or 1-cent) sales tax increase that was placed on the November 3, 2026, General Election ballot by the City Council. It is projected to generate approximately $3.7 million annually, and could help fund local City services, public safety, wildfire mitigation programs, infrastructure and parks and recreation initiatives.

The City's Fiscal Year 2026/27 budget is balanced. However, the City is projected to face a General Fund shortfall of approximately $400,000 in Fiscal Year 2027/28, growing to about $4.1 million over the next five years. These projections assume the City continues providing its current level of services with existing staffing, even as American Canyon grows and demand for City services increases. They do not include additional police officers for patrol and traffic enforcement, additional resources for fire mitigation, expanded parks and recreation services, or other staffing and infrastructure needs that may arise as the community grows. As a result, the City's actual funding needs could be greater than the projected shortfall. 

Sales tax is one of the City's largest revenue sources and helps support essential City services such as public safety, fire mitigation, parks, recreation, and other community services.

If approved by the voters, all revenue generated by Measure P would remain in American Canyon and be under local control. Funds would be deposited into the City's General Fund and could only be used to support general City services. Examples of what these funds could be used for includes maintaining and investing in 911 emergency response, fire mitigation efforts, and parks and recreation programs and services here in American Canyon. 

The elected City Council represents the residents of American Canyon and is trusted to oversee the City's finances and establish policies that reflect community priorities. Each year, the American Canyon City Council adopts the City's budget during public meetings, reviews financial reports throughout the year, and oversees the responsible management of public funds. The City also undergoes annual independent financial audits and has a strong track record of financial stewardship. For the past 10 years, the City has received the Government Finance Officers Association's (GFOA) Distinguished Budget Presentation Award, a national recognition for excellence in budgeting and financial transparency. 

American Canyon's sales tax is the lowest among its closest neighboring cities. The proposed sales tax increase would make the City's rate the same as Napa's rate. 

California law exempts most essential household expenses from sales tax, including groceries, prescription medications, rent, and utilities. The tax applies to taxable retail purchases, such as dining at restaurants or purchasing beverages from a coffee shop. For a typical household in American Canyon, a one-cent increase amounts to $1 on a $100 taxable purchase. Because the tax applies to purchases made within the City, it is not paid only by residents but also commuters and visitors who shop and dine in American Canyon, including those traveling along the Highway 29 corridor.

Business location decisions are based on many factors, including access to customers, proximity to major transportation corridors, available workforce, land and lease costs, and the overall business environment. Sales tax is one of many considerations, and a one-cent difference is generally not the primary factor in where businesses choose to locate. Many communities throughout California has adopted local sales tax measures to help fund essential City services. American Canyon's location along the Interstate 80 corridor, its growing population, and its strong business community continue to make it an attractive place for retailers, restaurants, wineries, and other businesses.

Yes. If approved by the voters, Measure P is projected to generate approximately $3.7 million annually in additional local revenue for the City of American Canyon. The City is projected to face a General Fund shortfall of about $400,000 beginning Fiscal Year 2027/28, growing to approximately $4.1 million over the next five years if no additional revenue is generated. 

These projections assume the City continues providing its current level of services with existing staffing, even as American Canyon grows and demand for City services increase. They do not include additional police officers for patrol or traffic enforcement, additional resources for fire mitigation, expanded parks and recreation services, or other staffing and infrastructure needs that may arise as the community grows. As a result, the City's actual funding needs could be greater than the projected shortfall. If Measure P generates revenue beyond what is needed to address the City's budget shortfall and maintain existing services levels, the City Council could consider investing in additional community priorities. Because Measure P is a general tax, all revenue would remain under local control, and spending decisions would be made by the City Council during public meetings as part of the annual budget process. 

American Canyon's sales tax base comes from a variety of businesses, including local retailers, stores, restaurants, wineries, and distribution facilities. Many of the City's warehouse facilities are wineries or wine-related businesses. Although many wine purchases are made online, the products are stored and shipped from facilities located in American Canyon. Because the point of sale occurs in American Canyon, they generate local sales tax revenue for the City. Wine-related warehouse businesses account for approximately 17% of American Canyon's total sales tax revenue. 

American Canyon is also home to distribution and logistic businesses, including Amazon, Biagi Bros., and G3 Enterprises. These businesses provide local jobs, support the regional supply chain, and contribute to the City's economy in a variety of ways. While they generate little to no direct local sales tax because the taxable purchase occurs elsewhere, they remain an important part of the City's diverse business community. 

The estimate that more than 50% of purchases are made by nonresidents is based on the City's existing sales tax activity, the types of businesses generating that revenue, and regional travel patterns. Because sales tax data does not identify where each individual customer lives, the percentage is an estimate rather than a precise point-of-sale calculation.

The City's analysis considers several major sales tax categories that serve customers outside American Canyon. For example, wineries and wine-related warehouses ship almost all of their product to customers outside the City, building material suppliers serve projects throughout the region, and an estimated 75% of fuel station activity is associated with nonresidents and through traffic. Three out of the four fuel stations consistently rank in the top 10 sales tax revenue contributors in the City.

If approved by the voters, the additional 1% local sales tax would generate approximately $3.7 million annually and would go directly to the City of American Canyon. The revenue would remain local, would not be shared with the State or County, and could only be used to support general City services and community priorities identified by American Canyon residents. 

Today, the City receives 1% of the existing 7.75% sales tax. The remaining portion is distributed to the State of California, Napa County, and other agencies. If Measure P is approved, the City's local share would increase from 1% to 2%, while the State and County shares would not increase as a result of Measure P. 

The City evaluated several potential sources of additional revenue. However, state law and practical limitations restrict how much funding many of these options could provide: 

• Property Taxes: The City evaluated the option of a parcel tax. However, unlike a local sales tax, a parcel tax would be paid only by local property owners. The City sought a revenue option that would be shared more broadly by residents, visitors, and others who make purchases in American Canyon, rather than placing the full burden on local property owners. In addition, Proposition 13 limits the City's ability to increase property tax rates, and American Canyon only receives a portion of the property taxes collected locally, with the remaining share allocated to schools and other public agencies. 
  
  
• Hotel Taxes: American Canyon currently levies a 12% Transient Occupancy Tax (TOT) on hotel stays, plus an additional 2% that is dedicated to the Napa Valley Tourism Improvement District (NVTID). The City's four hotels: DoubleTree, Fairfield Inn, Holiday Inn Express, and Home2 Suites, generate approximately $2 million in annual TOT revenue for the City. The City evaluated whether increasing the TOT could generate additional revenue. While the City could consider increasing TOT by an additional 1%, it would generate an estimated $167,000 annually. 
  
  For comparison, the City of Napa also has a 12% TOT, plus the additional 2% dedicated to NVTID, but has 52 hotels compared to American Canyon's four. Increasing American Canyon's TOT above Napa's rate could make the City's hotels less competitive with nearby communities when visitors choose where to stay while visiting the Napa region. Based on this evaluation, the City identified a local sales tax as the option with the greatest potential to generate meaningful revenue while distributing the cost more broadly among residents, visitors, commuters, and others who make taxable purchases in American Canyon.   
  
  
• Permit and Recreation Fees: The City completed a comprehensive cost recovery study in 2023 and has been gradually adjusting permit and recreation fees to better recover the cost of providing these services. Recreation programs include both resident and non resident rates, with non residents paying 15% more than residents. At the same time, the City strives to keep recreation programs affordable and accessible while continuing to provide many community services and events at little to no cost. This includes community celebrations, community grants that support local nonprofits and community partners, and other services that help bring residents together. Permit and recreation fees help offset the cost of providing specific services, but they are not intended to fund essential City services such as public safety, parks maintenance and infrastructure, and other General Fund needs. 
  
  
• New Development: New homes, businesses, wineries, and distribution facilities contribute to the City's economy and generate additional property tax, sales tax, and other revenue over time. However, the amount and timing of this revenue depend on the pace and type of development. New development also increases demand for City services and infrastructure, including public safety, parks, and recreation. While continued economic development remains an important part of the City's long-term financial strategy, it is not expected to generate enough revenue in the near term to address the City projected General Fund shortfall.   
  
  
• Local Sales Tax: The City evaluated a local sales tax because it is one of the few revenue options available that could generate funding on a scale comparable to the City's projected General Fund shortfall. Unlike a parcel tax, the cost is shared by residents, visitors, commuters, and others who make purchases in American Canyon. If approved by the voters, the additional revenue would remain in American Canyon, not shared by the State or County, and remain under local control, and would be used to support general City services and on community priorities.