Measure U's full half-cent sales tax OK'd by state
As a part of the state budget package, Governor Newsom signed a statute allowing the other quarter-cent of Measure U's half-cent sales tax to go into effect
At the city council meeting last night, Interim City Manager Mary Gourley announced that legislation allowing Sebastopol to have the additional quarter-cent of Measure U’s half-cent sales tax had been signed into law by Governor Newsom.
This morning, the city released the following press release:
The City of Sebastopol is pleased to announce that SB 132 has been adopted and signed into law by Governor Gavin Newsom. The statute will enable the full implementation of voter-approved Measure U.
This marks a crucial milestone: the second ¼-cent sales tax authorized by Sebastopol voters under Measure U is now anticipated to go into effect on January 1, 2026. Upon implementation, the City’s sales tax rate will increase to 10.5%. Until then, Sonoma County will continue to remit an amount equivalent to this additional ¼-cent to the City. Final implementation timing is pending confirmation from CDTFA.
Background on Measure U
In November 2024, Sebastopol voters approved Measure U, authorizing a ½-cent local sales tax estimated to generate approximately $1.5 million annually for the City over a 12-year period. The tax is critical for maintaining and enhancing essential local services, with 100% of the revenue retained in Sebastopol.
How Measure U Funds Will Be Allocated
City Council adopted a four-point funding policy to ensure transparent and effective use of Measure U revenues:
40% will maintain and repair roads, streets, drainage, and parks.
A sufficient amount will support public safety, including retaining existing Police Department staffing and funding fire services during the transition to the Gold Ridge Fire Protection District.
Any remaining funds will support 911 emergency response, wildfire/emergency preparedness, library, youth and senior services, local business retention/attraction, trails and general government operations.
Revenue collected during FY 2024–25 will be held until year-end numbers are confirmed, ensuring allocation decisions are based on actual fiscal outcomes
Measure U also incorporates strong fiscal checks and prohibiting fund transfers outside Sebastopol or to other agencies.
Next Steps
January 1, 2026: Second ¼-cent sales tax begins, contingent on CDTFA confirmation.
Until then, the City continues receiving equivalent funds via Sonoma County.
City Council and staff will keep the community updated on new developments through our website and official announcements.
“We are grateful for the community’s continued support and for our partnership with the County, as well as Senator McGuire and Assemblymember Rogers, as we move toward full implementation of Measure U," said Sebastopol Mayor Stephen Zollman. “With this uniform funding and strong accountability, Sebastopol can successfully sustain our critical services and invest in our community’s future.”
Additional information, background, and FAQs may be found on Measure U section of the City website.
This morning, the Sebastopol Times asked Interim City Manager Mary Gourley about the state-level process that allowed the city to get the full half-cent sales tax. She responded as follows:
State law generally allows cities and counties to enact transactions and uses taxes (commonly known as sales taxes) in a combined amount of 2%. Revenue and Taxation Code 7292.8 authorizes Sonoma County and cities in Sonoma County to enact an additional 1% of sales taxes. The statute was ambiguous whether that was a combined 1% limit or 1% for both the County and each City. CDTFA interpreted the law as allowing a combined 1%, which made it impossible to fully implement Measure U and Measure I [the county childcare tax].
SB 132 amended Section 7292.8 to make is explicitly clear that both the County and each city can enact an additional 1% tax. Note—under both the prior statute and new statute, taxes must be voter approved by January 1, 2026, to qualify under the special authorization.
Since November, both the City and County have been working with Sen. Mike McGuire’s office to have the Legislature enact this clarification. There are multiple bills adopted as part of the annual budget, and this legislative fix was included in one of those budget trailer bills.
There were smiles all around in the council chamber when, early in the city council meeting, at the beginning of the budget discussion, Gourley announced that the city would indeed be receiving the full half-cent sales tax from Measure U.
Administrative Services Director Ana Kwong said this meant the city had an additional $375,000 that they could add to the budget for next year. After a long budget discussion, the council decided to move the majority of those additional funds ($350,000) into the Capital Improvement Program—specifically into the city’s paving program to help fix the streets.
Thanks for making street repair the number one priority.