Measure V: The permanent temporary half-cent sales tax
On this year’s ballot the City of Sonoma is asking voters to approve Measure V, the half-cent sales tax first approved in 2012 and renewed, for another five years, in 2016. Each time, the pitch was that the tax was temporary, that it would automatically expire after five years.
But this time approval comes without any expiration date or renewal requirement. In both the 2012 and 2016 elections, the proposed tax measure included a five-year sunset clause. This year, amid the Covid-19 crisis and unprecedented fires, the city proposes that the sales tax renewal never expire, unless the City Council decides to do so. In other words, permanent.
Backers of Measure V point out that although the added sales tax is only half a cent, it amounts to roughly $2.5 million each year added to the city’s General Fund – roughly 12 percent – which can be used for a variety of expenditures without constraint. Because the funds are undesignated, tracking exactly how the accumulated half-cent has been spent is impossible.
Right now, the city faces financial stresses unlike any seen since 1994, when the city discovered its general fund was out of cash.
The economic impacts of the pandemic and local fires raging are enormous. Tourism revenue is far below normal; it may be years before it recovers. The city’s own financial projections indicate yearly deficits for the next five years, even after including the half-cent tax revenue. In the sample ballot, proponents note, If we lose this funding, we’ll face significant cuts to essential services. The City has explored other funding options, the argument goes, but they are limited.
Opponents of Measure V rely on issues of fiscal prudence and say that sales taxes are regressive, taking a much higher percentage of income out of the hands of lower-wage earners than from the wealthiest. This argument is bolstered by the city’s mixed history of getting a handle on its finances and keeping up with accurate and timely financial reporting. Example: the city illegally transferred money from its Water Enterprise Fund, an activity halted after an attentive citizen objected to that improper money shuffle. Producing monthly financials was ignored until then-Mayor Harrington insisted they be prepared. Staff training and staffing in the finance department has been an ongoing failure, only recently addressed.
The regressive nature of a sales tax is undeniable; the wealthy feel no pinch but for those with low incomes, every half-cent matters. Measure opponents argue that it’s time, at long last, for local governments to tighten their belts, adjust their spending like the rest of us, and not ask for new or extended taxes this year. 2020 is clearly the wrong time to ask voters for more money.
Despite the fact that running local government gets more expensive with each passing year, we find ourselves in agreement with those opposing Measure V. The current sales tax does not expire until 2022, leaving time for the city to get its financial house in order. This includes a major belt-tightening of the city’s budget and developing new sources of revenues that are not sales tax-based, such as increasing the real estate transfer tax. An impartial and studious review of the city’s financial structure and economic future is called for, perhaps by a Blue Ribbon Panel of Sonoma citizens as has been done in the past. Vote NO on Measure V.
– Sun Editorial Board
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I would like to see how much of the cities budget is already committed for Legacy costs like pensions and retiree medical insurance. I suspect the declining services are directly related. Most residents have no idea how much lush pensions and retiree medical benefits cost. There is no private sector equivalent.