City council votes to put half-cent sales tax on the November ballot
Hoping to avert financial disaster, the council bows to necessity
It took a year of work, multiple failed attempts, expensive polls, highly paid consultants and a new city manager, but the Sebastopol City Council finally managed to get the votes together to put a half-cent sales tax on the November ballot. The vote, which required a four-fifths vote of the council to pass, was unanimous.
Even more miraculous, they did it in less than an hour—after a grueling six-hours of budget wrangling, during a council meeting that lasted from 4 pm to 11:30 pm.
“What a meeting!” Mayor Diana Rich said this morning. “Talk about an odyssey, but wow, what great results. I’m so impressed by the city council.”
Longtime hold outs—Councilmembers Jill McLewis and Sandra Maurer—extracted small concessions in exchange for their yes votes.
Maurer said she’d vote for the half-cent measure—in the past, she’d held out for a quarter cent—if the council would agree to put in a sunset clause. They agreed with her suggestion of a 12-year sunset clause—meaning the measure would expire after 12 years.
McLewis extracted a promise from her colleagues that they’d put a city council policy in place, determining how the money was to be spent.
“Everyone knows that I’ve voted no on tax measures in the past, and I’ve been trying to work through this to figure out how to get to yes,” she said.
“Would the council be willing come back in earnest—not at the next meeting, but at the meeting after that or even the beginning of September—and put together a council policy on priorities of expenditures from the sales tax?” she asked. “For example, a percentage for roads, a percentage for public safety, a percentage for parks…I’m just wondering if our council would be willing to do that, because I’m trying to get to yes here, I truly am.”
The council was more than willing.
McLewis added teeth to her request.
“I just want to make sure that everyone’s in earnest to bring that policy back because that is the deal breaker for me. If that doesn’t happen, I will come out hard against this sales tax. I just will because we owe the voters that,” she said.
In the end, the council acceded to this demand.
Interestingly, using a council policy to limit what sales tax funds can be used for is a way of skirting an electoral requirement that a general tax measure be used for general fund purposes—and not a specific purpose. Taxes for a specific purpose (which are called “special taxes”) have to be approved by more than 66% of the voters. A general tax measure—where taxes go to a city’s general fund—requires only a simple majority—over 50%.
The city’s electoral consultant, Alex Mog, assured the council that making a council policy was perfectly legal. “So that kind of policy is allowed. It won’t make it a special tax because it’s just a council policy. It’s not part of the measure.”
He also pointed out that future councils could choose to change that policy.
Bumping up against the ceiling
In the November election, the Sebastopol half-cent sales tax will face competition from a quarter-cent County sales tax measure known as “Our Kids, Our Future.” If both taxes pass, Sebastopol will be bumping up against the state sales tax ceiling of 10.25%.
Sebastopol’s current sales tax is 9.25%. Once the Measure H (fire protection) half-cent sales tax goes into effect in October of this year, that will raise Sebastopol’s sales tax to 9.75%. If the county-wide “Our Kids, Our Future” quarter-cent sales tax passes, that would push Sebastopol’s tax rate to 10%, just a quarter cent away from the state’s sales tax cap.
Because of the wildfires, the state gave agencies in Sonoma County a little more leeway, allowing municipalities to raise taxes a little higher than this cap.
According to the staff report, “The City Council could propose a measure that combines a 0.25% tax under the remaining general authority and a 0.25% tax under the additional authority for Sonoma agencies, for a combined rate of 0.5%…The measure would expressly explain the reliance on both legislative authorizations and state that, if one portion of the tax is invalidated, the other should survive.”
What happens if voters approve “Our Kids Our Future” and the Sebastopol sales tax? That’s anyone’s best guess. Sebastopol’s half-cent sales tax measure could be reduced by the county or the state to just a quarter-cent sales tax. Or there could be a legal challenge to the cap itself.
In the meantime, Mayor Rich is basking in the afterglow of a successful meeting.
“Everyone really wanted to get it done,” she said, “and I’m so pleased.”
Care to dip into the deeper tax details surrounding this topic? Read the tax explanations in the May 21, 2024 and July 16, 2024 staff reports.
Gratitude to our council members for their commitment to finding the most reasonable solutions and patiently working towards consensus. It ain’t easy.
And a big hat tip to the intrepid journalist who sits there meeting after meeting and reports back so thoughtfully, keeping the rest of us in the loop.
I was in a meeting with the Vice Mayor of Petaluma. He said that Petaluma was in the red not long ago and their new City Manager had ideas to being money in. They are in great shape now. Perhaps someone could find out what they did.