Measure U: Urgent or unnecessary?

Is the sales tax too high in the City of Sonoma, or do you not even notice it?|

Measure U

Needed: 51 percent in favor

Wording: To continue funding, that cannot be taken by the State, for general city services including preserving the quality of life in Sonoma, and to provide funding for essential services such as police, fire and emergency medical services, street maintenance, affordable housing, parks and other general community services, shall the City of Sonoma extend the existing vote approved sales tax of one-half of one percent for a term of five years, with all funds to be spent locally.

City residents in November will be asked to decide if the additional half percent Measure J sales tax paid inside City limits should be extended for another five years. The extension is called Measure U.

Measure J currently brings in $2.2 million a year to the City and it comprises 12.9 percent of the total City General Fund annual revenue. The City's overall budget is $17 million. In total, the City's hotel tax (TOT) sales tax and Measure J account for more than 50 percent of the City's revenues.

Despite the fact that property taxes have increased dramatically in recent years, they are no longer a major source of revenue. Last year, the City of Sonoma only kept $2.7 million of the property taxes paid by its residents, as opposed to in 2011, when the City kept $6.9 million in combined property taxes and redevelopment funds.

The absence of the redevelopment funds is at the crux of the issue, according to City Manager Carol Giavannatto.

Explained Giovannatto, “While the City has seen some healthy increases in TOT [hotel tax] and sales tax revenue, these increases have not matched up to the decline in revenue resulting from the loss of development funds.”

“We hoped that we might see that money come back in other ways but that really hasn't happened. The loss of redevelopment funds was a $5 million a year hit to our General Fund and it isn't ever coming back,” she said.

The Measure J sales tax was passed by City Council at the height of the recession. It was initially set to “sunset” in five years.

“It's not that the City Council made a promise it didn't keep (in asking for Measure U),” said Giovannatto. “The end of the redevelopment funds completely changed the game.”

It is the contention of City staff that absent the passing of Measure U, the City's General Fund will be facing an annual loss of approximately $2.2 million in revenue at could cause “significant” cuts to core public services, including reductions in city services that could include 9-1-1 response times, public safety, youth crime intervention programs, economic development programs, community grant programs and park, street and pothole maintenance services. Giavannatto demurred when asked to cite any “low hanging fruit” that could be cut in the event that Measure U does not pass.

“Our biggest expenditures are police, fire, EMS and these are critical functions,” she said. Almost 60 percent of the City's revenues are earmarked for police and fire.

City road are also at stake. City residents have noticed large signs touting that, “These road improvements brought to you by Measure J” around town recently. According to Giovannatto, the City spent upwards of $1-2 million a year on street and infrastructure projects back when it had access to redevelopment funds but that number decreased to $200,000-$900,000 annual after the loss of redevelopment funds, even with Measure J funds.

“Losing these local sales tax funds would be a hit to every citizen and to the character of this community,” said Edwards.

“Former mayor Joanne Sanders disagrees, “This is an unnecessary tax for the public and the recessionary conditions that existed when it was suggested a temporary emergency measure are long gone.” She runs the numbers differently and believes that the City's revenues sources have rebounded with the economy and are now up 34 percent since 2011 without Measure J.

Sanders leads the opposition to the tax. She was on the City Council when it passed and she see it as a tool that should be returned to the shed until it is truly needed again. “When the next economic downturn hits, we need the option of raising sales tax to survive the next fiscal crisis,” she said.

Giovannatto counters that if the City doesn't not pass a sales tax, it is entirely likely that another entity will pass a sales tax in its place, at which point the state-imposed cap could mean that Sonoma lose any opportunity to reinstate a local sales tax in the future. “We have our foot wedged in the door and need to hold our place,” said Giovannatto. “It's a business move,” said Edwards. “And it's the right move at the right time.”

Of the current 8.25 percent in sales tax currently paid on every retail purchase in the City, the City of Sonoma receives just one percent, the rest is split between State, County and Special Districts. The City, however, keeps 100 percent of the funds levied above and beyond that 8.25 percent. Unlike property taxes, all funds from a “local revenue measure” like this sales tax increase must stay in Sonoma and can't be taken by the State. According to the City, the bulk of the sales tax comes from restaurants and markets. Giovannatto estimates that around one third of all sales tax paid at retailers in the City of Sonoma is paid by tourists, two-thirds by locals.

“City staff takes their role of spending City funds very seriously,” added Edwards. “The staff is a solid team that treats their work like it's their own business. They don't like to see wasted dollars.”

He added, “I believe in living within your means. I would like to change this Council up so that everyone thinks that way. But that said, I believe we need this tax.” He added that he would, however, “push to not have to renew again after this election.”

Both City Council and City staff would spend the next two years strategizing ways to transition away from the sales tax by the end of the next five-year period. “We would take a calculated look at our financial forecast including the income brought in by any new hotel rooms, and develop a plan to phase out Measure U by the next ballot.”

Measure U

Needed: 51 percent in favor

Wording: To continue funding, that cannot be taken by the State, for general city services including preserving the quality of life in Sonoma, and to provide funding for essential services such as police, fire and emergency medical services, street maintenance, affordable housing, parks and other general community services, shall the City of Sonoma extend the existing vote approved sales tax of one-half of one percent for a term of five years, with all funds to be spent locally.

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