The Sonoma City Council will hold its first Revenue Enhancing Meeting on Wednesday evening, November 2 – just as The Sun goes to press. According to city councilmember Ken Brown, the council is choosing to be proactive to spur revenue in the City of Sonoma rather than sit back and adopt a laissez faire attitude. Bravo!
At its August 15 meeting, the City Council directed staff to schedule a study session on revenues. Mayor Laurie Gallian said the goal of the session will be to provide an opportunity for a comprehensive review of revenue sources with input from the public and all stakeholders. In preparation for the Wednesday meeting, City staff gathered the following information for a discussion and review of City revenues:
• An overview of revenue sources of the City of Sonoma.
• A 10-year history of major general fund revenue sources.
• An explanation of revenue sources including ideas for enhancement of current revenue sources.
• Information regarding taxes, fees and other revenue sources including economic development.
• An impact of state proposal on Community Development Agency (CDA) revenue.
• Future venue requirements of the Coty of Sonoma and options for revenue development.
In its FY 2011-2012 budget, general fund revenue comprised 46 percent of revenue. Of that amount, 24 percent comes from property taxes and 21 percent from TOT, or transient occupancy tax. Basically tourism. Property and sales taxes seem to be holding their own. Real estate taxes have taken a significant nose dive – from an all-time high in 2004-2005 to now, almost the lowest point in the past ten years. Business license revenue is still up but the loss of revenue is certainly more obvious in some areas like building related fees which has been moving slowly downward since 2003.
There are some target areas for increased revenue like raising the TOT – the rate of which hasn’t increased since 1992 – by way of the next election. Currently a 10 percent tax is imposed on overnight stays not exceeding 30 days in duration. The current projected revenue for FY 2011-2012 is $2,330,000. It seems obvious that an increase in TOT would go a long way toward increasing revenue. Likewise an increase in sales tax in the City limits. Currently the City receives one cent on every purchase of a taxable item purchased in the City limits – another reason to shop local. This got tricky in 2004 when the state sought money for a fiscal recovery plan, thus reducing the city’s sales tax share by 0.25 percent until the bonds are repaid in 10 years times.
The list goes on to include fees on almost anything one can imagine from increasing business license fees to installing parking meters downtown. There will be critics and fans of each and every line item. What’s important is that our City Council is being proactive in researching options. For those who missed the meeting, the entire list of items is available at sonomacity.org. Or check back in The Sun for a follow up report.