Measure U passed… now what?
In a pre-election editorial we took the position that Measure U — the half-cent sales tax extension — should be rejected, yet it passed with a whopping 70-percent plus majority. Clearly, our concerns were not the concerns of Sonoma’s voters, namely that the City had not demonstrated sufficient fiscal responsibility over the past five years.
Now that the tax measure has been extended, the obvious question is will the City of Sonoma “get religion” and begin to replace the revenues that this half-cent tax provides before it expires in five years? We ask because this is exactly the same situation which existed when the original measure was passed in 2012, but instead of properly planning its financial future, the City, like Aesop’s fabled Grasshopper, just fiddled around.
What are the ways the city can generate $2.1 million without again taxing citizens with a regressive sales tax? We’d like to suggest some ways to begin:
Raise the Transient Occupancy Tax (TOT). Now that the County of Sonoma has raised its TOT, the City of Sonoma TOT is far lower than that in our area. It’s two points lower than Napa and three points lower than the County of Sonoma. A two percent increase would yield roughly $700,000 per year for the city, a tax paid by hotel guests that neither the state nor county can tap.
Stop spending money for visitor services. As long as the Tourism Improvement District (TID) exists, which will be for another nine years, at least, it should fully fund the Visitor’s Bureau. With its $700,000 per year revenue stream, the TID can well afford to carry the cost of serving the visitors it attracts to Sonoma. This would save $100,000 per year for the city.
Raise the price of violating the law. Illegal vacation rentals generate illegal, ill-begotten financial gains; the City of Sonoma should get far more aggressive about levying fines for operating an illegal business. The fines should be substantial enough to dissuade property owners from taking the risk. Estimated revenues: $100,000 per year.
Tax the sales price of million-dollar real estate. When a million dollar home or commercial property in Sonoma is sold, a special tax should be levied and those revenues used to fund affordable housing. A one percent tax on a million dollar home only adds $10,000 to the purchase price. The sale of just ten homes priced above one million dollars will generate $100,000 in city revenues, and given the current surge of commercial development, the likelihood is that far more than that would be generated yearly.
These ideas, some of which we’ve suggested before, represent obvious, low-hanging financial fruit; with some thought and creativity additional revenues sources can be identified and developed.
The voters have spoken; residents rich and poor will continue to pay a regressive sales tax every time we shop “local.” It’s ironic — we put such effort into our support of local merchants, but paying sales tax can often be avoided entirely on the web. But the bigger issue is fiscal responsibility, and we will continue to hold the City’s feet to the fire. We hope the Council and new City Manager don’t wear asbestos socks.
— Sonoma Sun Editorial Board
